In the face of high unemployment and slow market growth, consumers remain more cautious of their spending, and for the first time in almost a year, consumer credit use is declining.

The Federal Reserve found that over the last 11 months, consumer credit has declined 1.5 percent, specifically among credit cardholders. This drop in credit card spending offset marginal growth in student and auto lending.

Consumers Reduce Reliance on CreditHigh unemployment continues to weigh down spending and spur demand for student loans as skill-seeking workers wish to improve their prospects with higher education in this increasingly competitive job economy.

According to economist Roderick Surrett, the U.S. economy is maintaining market growth of only 2 percent, a level that will keep the nation out of recession, but it isn’t enough to encourage job growth.

Despite positive trends in consumer credit management including decreasing mortgage debt and healthy spending, this slow growth is expected to continue.
Actionable Credit Tips for Consumers

Although consumer debt is decreasing, the Federal Reserve reports the national consumer debt total remains $2.7 trillion, with the average household debt equaling more than $50,000.

To reign in your credit, and reduce your reliance on credit and borrowing, consider changing the way you approach your finances. If the recession taught us anything, it’s that crisis can strike at any time, and you need to be prepared.

No longer can consumers afford to spend beyond their means and place their excess expenses on credit cards with the hope of salvation somewhere in the future. If you can’t afford to pay down your credit card every month, cut out unnecessary costs to get ahead of the debt, and quit chasing it.

Prioritize your payment obligations to avoid falling behind on any payments. Also, avoid taking on any new debts, especially if you’re overworked trying to keep up with current debts.

If you fall behind on some of your financial obligations, and find yourself looking toward a personal loan as your only option, consider holding off until you arrange your funds and have more available.

There may be little you can do about the sluggish economy all on your own, but you can make the best out of what you’re given.