A new report shows that consumers are charging less to their credit cards and are paying down the balances on those cards.

The Federal Reserve reported that revolving credit — like credit cards and student loans — fell at an annualized rate of 11 percent in April (“Fed: Credit Card, All Consumer Spending Declines,” CreditCards.com., June 5, 2009).

This is the seventh straight month of declines in revolving credit since October 2008 and the longest pullback in credit on record since the Federal Reserve began reporting on it in 1968.

“The trend is certainly toward having less revolving consumer credit outstanding,” said Cynthia Ullrich, senior director at Fitch Ratings in New York.

Consumer credit, the credit that’s available to consumers for borrowing, dropped as well in April by $15.7 billion, or at an annual rate of 7.4 percent, making this decline the second largest in consumer credit in history, MarketWatch reports (“Consumer Debt Plunges by $15.7 Billion in April,” June 5, 2009).

The Federal Reserve also reported that consumer debt has decreased by $35 billion over the last year, after jumping $131 billion in 2007, and that standing debt has fallen by over $43 billion. Outstanding debt only drops when more consumers begin paying off their existing debt or when lenders begin writing off consumers’ debt.

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Popularity: 1% [?]

With a vote of 45 to 51, Senate Republicans defeated a measure that would have allowed bankruptcy judges to modify mortgage terms for bankruptcy filers, dealing a blow to the Obama administration’s foreclosure rescue program, which has yet to make a noticeable dent in the number of families losing their homes, The Washington Post reports (“Senate Defeats Measure to Allow Bankruptcy Judges to Change Mortgage Terms,” April 30, 2009).

The defeated measure would have allowed bankruptcy court judges to modify the mortgage terms of a bankruptcy filer’s primary residence with the possibility of having the filer’s interest rate or principal balance lowered in a process known as a “cramdown.” Currently bankruptcy judges can only modify mortgages for second homes or investment properties.

While opponents of the bill, including the nation’s biggest banks and Republicans in the Senate, argue that the bankruptcy modification provision would increase lending costs for future homebuyers and, therefore, destabilize the housing market even further, supporters of the cramdown measure contend that it would help more than 1.7 million struggling homeowners to stay in their homes.

In spite of the defeat, the measure’s sponsor, Senator Dick Durbin, D–Ill., is determined to keep pushing for cramdown legislation that he says is needed. In the time since he’s been campaigning for bankruptcy code reform, Durbin says home foreclosures have jumped from 2 million to 8 million.

“I’ll be back. I’m not going to quit on this,” Durbin said. “At some point, the Senators in this chamber will decide the bankers shouldn’t write the agenda for the United States Senate.”

The measure is part of a larger Senate housing bill that includes a provision to revamp the Hope for Homeowners program and a proposal to temporarily increase the deposits guaranteed by the Federal Deposit Insurance Corporation, and which still has to be reconciled with the House’s version of the bill. House Democrats will most likely remove the cramdown measure from the bill to help get it passed by both houses of Congress.

Popularity: 3% [?]

Americans may want to mark Feb. 14 on their calendars for a reason besides Valentine’s Day; it’s the last day consumers will be able to access their FICO credit scores on myFICO.com with Experian credit data included, The New York Times reports (more…)

Popularity: 9% [?]

You may’ve seen the headlines. Unsuspecting tenants who are responsibly paying their rent on time are among a growing number of foreclosure victims – as many as 40 percent of renters in single-family housing are being evicted from foreclosed rental properties after their cash-strapped landlords stop paying the mortgage, reports the National Low Income Housing Coalition in Washington, D.C. (more…)

Popularity: 6% [?]

This holiday season some well-meaning friends may have missed the mark on a few of the gift cards they gave you: cards to a store you’d never step a foot in, to a store that’s not in your area, or to a coffee shop when you prefer to get your daily dose of caffeine from a soda. (more…)

Popularity: 5% [?]

Interest rates on 30-year fixed-rate mortgages have fallen to their lowest level in more than four years, averaging 5.33 percent, according to financial publishing company HSH Associates. (more…)

Popularity: 7% [?]