Americans Borrowing Less, But Only Because Credit's Tight

The good news--Americans are borrowing less. The bad news--the good news may be due to the fact that credit is harder to get.

By SHARE

The good news--Americans are borrowing less. The bad news--the good news may be due to the fact that credit of all sorts is much harder than it was to access before the credit crisis.

A new report by the American Bankers Association says:

Late payments for bank-provided credit cards fell in the first quarter to the lowest level in eight years, the American Bankers Association reported Wednesday. Bank-card delinquencies, reflecting card payments that are at least 30 days overdue, fell to 3.88 percent of all accounts in the first quarter--the lowest rate since the first quarter of 2002--compared with 4.39 percent in the fourth quarter of 2009, according to ABA data.

Other data show mortgage defaults may have peaked in the second quarter of last year.

It’s certainly tougher to get a loan these days, not just for first and second mortgages but for bank loans, credit cards, even cell phone accounts. The so-called “no doc” mortgages of the infamous housing boom have gone the same way as skyrocketing home prices--they no longer exist.

Americans as a nation are way too credit-reliant and it’s a great piece of news that we are borrowing less. Uncle Sam should take a hint and follow suit. But if it’s only because we can’t get credit that we aren’t borrowing as much, that kind of news is not so good.