We have all heard it said: “Cash Is King.” A growing number of Americans are starting to agree.
Today in a USA Today article, FICO shared this information:
Figures provided by FICO show that 25.5% of consumers — nearly 43.4 million people — now have a credit score of 599 or below, marking them as poor risks for lenders. It’s unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use.
In a related story today on Yahoo news they said that Consumer borrowing was down sharply in May:
The Federal Reserve said Thursday that borrowing dropped by $9.1 billion in May. It also said borrowing declined by $14.9 billion in April, revising an initial estimate that showed a gain of $995 million for the month.
Consumer borrowing has fallen in 15 of the past 16 months as households have struggled with uncertain job prospects and battered finances following a deep recession.
…Credit card borrowing has fallen for 20 straight months. More Here…
A Wall St. Journal writer states that: “increasingly, only two types of people are going to use credit cards as a source of debt: Call them the dumb and the desperate.” I just think that people are starting to figure out that cash is king. Generations before learned this in the great depression… buy only what you can afford and save as much as you can. Our generation is learning this quickly. Teenagers are watching their parents fight over debt and finances and many will distance themselves from getting deep into debt.
