Consumer borrowing drops for first time in 10 years

CNN reports that consumer borrower fell in August for the first time since 1998.

Overall consumer borrowing dipped 3.7% in August. The last drop was 4.3% in January 1998. Credit card borrowing decreased at an annual rate of 0.8%. Non-revolving borrowing (such as student loans and auto financing), dropped by 5.4%.

Although the drop in credit card borrowing was slight; the industry is accustomed to seeing small but steady increases month to month. In today’s economic situation, however, consumers are showing they are less likely to want to charge purchases to their credit cards.

Credit card issuers themselves are feeling the pinch and are reacting by tightening application requirements and lowing credit lines. Consumers with good credit can still get a credit card today—you’ll just need to shop around a bit more for an offer that matches your credit history.