July 8th, 2010

Is It Your Patriotic Duty To Borrow Credit?

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credit karma

May marks the fourth consecutive month of continued decline in consumer borrowing, which means less consumer demand. With 70% of total economic activity attributed to consumer spending (Associated Press), Americans holding back on credit also holds back economic activity—all 70% worth. Granted, borrowing less on credit also means better personal savings and a marked decline in personal debt. But should consumers borrow more on credit to help our nation’s economic recovery?

The words “credit crunch” became a household phrase when it became the buzzword to describe the recession’s reduced availability of credit across the financial sector. Also known as the credit squeeze, American consumers are still feeling the pinch of tight credit as consumer credit fell at an annual rate of 4.5%, or $9.1 billion, in May, reports CNN Money.

This is the fourth consecutive month of declining credit in addition to disappointing retail sales since the beginning of the year. Though experts say that it’s not surprising that Americans are pulling back on spending, the credit crunch is still alive and well. The Associated Press reports that consumer borrowing fell in 15 of the past 16 months in the face of high rates of unemployment, a shaky housing market, and a volatile stock market.

Consumers borrowed less on revolving credit, such as credit card debt, with suffered a 10.5% drop. According to Credit Karma data, credit card debt decreased 1% in May to its lowest level in 2010. National credit scores remain stable as consumers keep debt down. Non-revolving credit, such are personal and car loans, also declined by 1.5%, or $1.82 billion.

What’s your take? How can consumers contribute to national economic growth and still keep their purse strings tight?

Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.


  1. The best thing you can do for your country is to save money and spend wisely. Communicate this to your government representatives. Expect government to balance their budgets.

    While government is running up deficits people who have money to spend (like me) will only save more because the future is uncertain. To get the economy moving again, governments need to take the temporary pain of balancing their budgets, and then the situation will improve because the economy will be based on a firm foundation.

    Also, if you owe money, pay your debt. Do not walk away from it if you have the means. Your word is your bond.

    rick@rickety at 8:53 am on July 11, 2010
  2. if we are “supposed” to help our country, so should the credit card companies. Lower % rates, etc. It goes both ways!

    Dan at 3:08 am on July 12, 2010
  3. @rick i think the most important thing you mentioned is “if you owe money, pay your debt.” thats the key. if everyone was more responsible about their money and dealing with debt, it would help lighten the economy’s troubles because we could be more financially independent from a suffering system. we should be owning our money, not the other way around.

    justine at 1:18 pm on July 13, 2010
  4. Is it your patriotic duty to borrow—-?

    Is this some sort of a joke? Let’s see, our government has engaged in corporate welfare by the bailout of the financial system which was essentially free money that did not have to be paid back…ahem……so essentially they were rewarded for irresponsible behavior. Their response was predictable…they gave the profiteering money-mongers at the top bonuses. Folks, they took the money and ran–leaving the rest of the country to languish. Isn’t this ignoring the fact that people without jobs at a living wage cannot afford to borrow? I think that what is ultimately going on here is a massive redistribution of wealth in this country—where there used to be a middle class (a strata of society that you could turn to in times of a governmental fiscal crisis to bailout the country by raising taxes). Soon, there is only gong to be the HAVES and the HAVE-NOTS. My pet theory is that the people at the top are aiming to breed its own particular type of constituents: They will pay your cable bill, discount or pay for your hovel, let you buy all the twinkies and potato chips that you want, and take care of your health—provided it is not particularly urgent or too costly. Heck, they will even give you a free cell phone. All you have to do is surrender your critical thinking skills and power to evaluate the choices made by the Folks In Charge.

    The bottom line is that I think that this is going nowhere good.

    Melz at 3:38 am on July 17, 2010
  5. The mortgage calculator answers the question “how much can I borrow for a mortgage?” by taking a few of your details and then estimating what a bank would loan you in the event that you do apply for that loan. The program is able to do this by using the same criteria that a bank would use in order to work out how much you would qualify for.

    How Much Can I Borrow for a Mortgage at 12:36 am on March 5, 2011

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