American credit card holders cut back their balances again in June, but a slower drop than previous months suggests that consumers may be loosening their purse strings. According to a Federal Reserve report, outstanding credit card debt fell another $1.3 billion between May and June. The Fed also corrected a preliminary report on May's household debt, restating that month's decline to $5.3 billion. Since the end of 2008, consumer credit card debt has fallen 13.3%.

Consumers have paid down so much of their credit card balances, economists say, that student loan balances edged out plastic as the number one source of household debt this summer. Blogging for the Wall Street Journal, Mary Pilon cites reports that student borrowing has risen sharply during the recession as many Americans try to build marketable job skills. In addition, many families have shifted household borrowing to parental student loans in response to shrinking personal credit lines.

About the Author

joe

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.