CNN Money reports:
Consumer credit pulled back for the seventh straight month in August, led by a steep decline in credit card usage, a government report said Wednesday, as unemployment soared and cash-strapped consumers continued to limit spending.
The total amount of credit outstanding fell by $12 billion, or 5.8%, to $2.463 trillion in August, according to the Federal Reserve. Economists predicted total borrowing would dwindle by $10 billion in August, according to a consensus survey from Briefing.com.
"Credit is being squeezed on both sides," said economist Sean Maher of Moody's Economy.com, adding that lending standards at banks remain tight and consumers are pulling back on their debt.
The last time consumer credit contracted for seven months in a row was in 1991. It has never dropped eight months in a row since the Federal Reserve started tracking it in 1943.
Source: Federal Reserve