WASHINGTON, Feb. 16 (UPI) -- Credit card debt has dropped significantly since it reached a record high in the summer of 2008, the Federal Reserve Bank of New York reported Tuesday.
Savings have jumped significantly since the bottom fell out of the mortgage market, The Washington Post said.
The Fed said total credit card debt has fallen 15 percent, auto loans by 12 percent and mortgage loans by 7 percent. The Commerce Department reported U.S. residents saved 5.3 percent of income in December, triple the rate in 2007.
Debt has fallen partly because borrowers were scared by the crash when the housing market collapsed and have been working hard at paying off what they owe and not running up new bills, the Post said. But banks and credit card companies have also become far more cautious about lending.
A third factor is that banks have written off a lot of debts, which has the effect of reducing the amount outstanding. While the first two factors are likely to help the economy recover, the third is not, the newspaper said.