Consumers Cashing In Maturing CDs to Pay Down Credit Card Debt
Consumers Cashing In Maturing CDs to Pay Down Credit Card Debt According to Latest Market Rates Insight Analysis
Latest research shows that $29 billion, or 15%, of maturing CDs balances were used to pay down credit cards and other revolving debt in the first half of 2010
SAN ANSELMO, Calif. (September 21, 2010) – According to the latest research from Market Rates Insight, Inc., (MRI, www.marketratesinsight.com), a leading research firm that tracks rates for deposits, loans, and fees for financial institutions, consumers are using their maturing CDs to pay down credit card debt. The latest research report shows that during the first half of 2010, CD balances dropped $200 billion, and $29 billion of that (15 percent) went directly to pay off credit card debt and other revolving debt.
The latest National Pricing Indicator report from Market Rates Insight shows that the overall balance for time deposits declined from $2,365 billion on January 1 to $2,165 billion by June 30, a decline of $200 billion. Total consumer debt (revolving and non-revolving) decreased from $2,451 billion in January 2010 to $2,422 billion in June of 2010 – a decrease of $29 billion. The lion’s share of the decrease in consumer debt during the same time period occurred in credit cards and other revolving credit from $859 billion to $832 billion – a decrease of $27 billion.
“One of the significant findings of this analysis is the positive relationship between CD and credit card balances,” said Dr. Dan Geller. “The research indicates a strong and significant linear relationship between these two variables, which means that as CD balances drop, so do credit card balances, and vice versa.”
For a copy of the complete analysis, visit Market Rates Insight research online at http://www.marketratesinsight.com/docs/NPI9.20.10.PDF
About Market Rates Insight
For more than two decades, Market Rates Insight (MRI) has been helping subscribers price with precision by providing banks, thrifts, credit unions, and other financial institutions with accurate market intelligence on deposits, loans, and fees. MRI uses deposit surveys, mortgage and consumer loan surveys, fee and feature studies, scanned ads, new product alerts, and market share and money fund reports to give subscribers the intelligence they need to profitably react to emerging trends. MRI’s products include customized, web-enabled market research tools that report on rates, as well as online searchable databases, gauges, alerts, and dashboards that aggregate key client data to provide real-time views on how they stack up against market competitors.
Market Rates Insight is located in San Anselmo, California. For more information, see www.marketratesinsight.com.
Dr. Dan Geller
Market Rates Insight
Market Rates Insight