Report: Credit card debt declines, more consumers borrow for school

Lender software is an essential tool for financial organizations of all sizes. Just because a potential borrower claims to have good standing, does not mean that it is true. By taking all payment histories into account, banks can find creditworthy borrowers who will not be detrimental to the organization.

However, research continues to show that consumers in the U.S. are gaining better control of their finances, which could lead to higher consumer confidence. Banks and other organizations should ensure that they have current loan management software, to account for a possible influx in borrower requests.

According to the latest report from the Federal Reserve, credit card debt for American consumers fell for the second straight month. On Monday, the Fed explained that even though U.S. shoppers are borrowing more, their amount of debt is decreasing.

Specifically, borrowing increased by $10.4 billion in July from June to a record $2.85 trillion. However, the auto and student loans categories were the largest increases, as those categories increased by $12.3 billion to a record $2 trillion. Actual credit card debt fell by $1.8 billion to roughly $850 billion.

"July consumer borrowing illustrated economic trends that have surfaced since the recession: Americans are using credit for their most urgent needs, while forgoing debt for discretionary purchases," the Associated Press explained.

The news source added that slower job growth and small gains in wages have pushed many Americans to hesitate when it comes to charging certain goods and services. Additionally, with higher Social Security taxes, U.S. consumers could be even more nervous to use their credit cards on daily purchases. 

Regardless of how consumers have used their credit cards, the right lender software will assist financial organizations in their decisions over who to take on as a borrower.

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