Americans Cut Down On Credit Card Use Despite Increased Benefits

Despite a number of new enticements rolled out by lenders in November, including increased credit card reward offers, Americans continued to consider spending options other than credit cards when making purchases.

Revolving credit – the kind that denotes credit card use – decreased by $4.2 billion, or 6.3 percent in November 2010, as holiday shoppers increasingly chose to use cash, check and debit cards at retail stores.

For the 27th straight month, U.S. consumers cut their overall borrowing, according to data released by the Federal Reserve in its monthly consumer credit report.

However, despite these decreases in credit use, Americans took on more debt in the form of nonrevolving credit, most of which was used for student loans.

Nonrevolving credit rose in November 4.2 percent to $1.6 trillion for the month, as students took out more money for payments. The lending increased due to a law recently passed by Congress that makes the U.S. government the primary lender to students, replacing a guarantor on private loans, The Wall Street Journal reports.

The statistics also seem to suggest that consumers continue to be cautious with new credit card offers from lenders, as they continue to avoid the payment type for purchases.

By: P. Miller

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Ryan Fields is a personal finance journalist for e-wisdom.com who covers a range of finance topics, including current trends with bank accounts , credit cards , insurance rates, and mortgage loans.