Americans continue to spend less on credit cards, according to the most recent index supplied by Fitch Ratings. Based on the company's survey of credit card portfolio, consumers paid down over 19% of their monthly balances during June 2010. Rising from 17% in June 2009, the figure indicates that many households have stuck to their budgets, making similar payments every month against steadily declining balances.

Federal Reserve figures, as reported by Dow Jones Newswire, indicate the same downward trend for credit card balances. Consumers owe $131.6 billion less than they did during the same period in 2008, a trend that cheers consumer advocates but concerns investors. With smaller balances generating fewer finance charges, many credit card issuers have turned to annual fees, service charges, and alternative revenue streams to generate profits.

Although many lenders have watched profits tumble over the past two years, American Express has enjoyed a renaissance. While AmEx's outstanding card balances fell by 9% during 2010's second quarter, its revenues rose by 13%. Most American Express accounts require balances to be paid off every month, an attractive option for consumers who want the security of credit card transactions without the possibility of mounting debt.

About the Author


Joe Taylor Jr. is an internal business consultant for a Fortune 500 company, who writes about finance, culture, and design. He holds a Bachelor of Science in Communications from Ithaca College.