A reader and tipster (send in your tips here) sent in a link that led me to the most recent Federal Reserve Bank of New York report showing the number of open credit card accounts. These are the types of accounts that are most addressed by debt relief providers.
The data seems to support the statement made to me recently by a credit counseling group that demand has fallen to level not seen since the beginning of the 2000s.
Telling as well of the lag in refueling the debt relief pipeline is the chart showing the number of new credit inquiries.
Aggregate credit card limits rose slightly during the quarter, reversing a long series of declines that began in mid-2008. About 195 million credit accounts were closed during the four quarters that ended March 31, while 166 million accounts were opened over the same period. Credit cards have been the primary source of the reductions in accounts over the past two years, and during 2011Q1 the number of open credit card accounts held roughly steady, at 379 million. Nonetheless, the number of open credit card accounts on March 31 was down nearly 24% from its 2008Q2 peak and balances on those cards were nearly 20% below their 2008Q4 high. The number of credit account inquiries within six months – an indicator of consumer credit demand – fell 3.5% after a string of three consecutive increases. – Source
The good news in the data is it appears to show a leveling off in decline but debt relief demand will not begin to increase until the number of open accounts and balances begins to increase and even then there will be a lag as demand recovers for debt relief providers.
Decline in Open Credit Card Accounts Helps to Show Why There is a Reduced Demand for Debt Relief Services by Steve Rhode
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