Consumers Purge Debt by a Record Amount

Consumer debt fell for the sixth straight month in July.

Author:: Jeanine Poggi
Publish date:: Sep 8, 2009 4:37 PM EDT

WASHINGTON (

) -- Consumers freed up their debt by a record amount in July -- which, looking at it from a purely consumerist point of view, means they might have some extra wiggle room when it comes time for holiday shopping.

Consumer debt fell $21.55 billion, to $2.47 trillion, the Federal Reserve reported on Tuesday, the sixth straight month it saw a decline. Economists expected consumer debt to sink by $4.3 billion.

Non-revolving credit, such as auto loans, personal loans and student loans, fell by a record $15.44 billion to $1.57 trillion.

Credit-card debt dropped $6.11 billion, to $905.58 billion during the month -- which could free up card balances just in time for the holiday season.

While discounters like

Wal-Mart Stores

(WMT) - Get Report

and

Costco Wholesale

(COST) - Get Report

have been picking up market share from consumers looking to save money, department stores and specialty retailers have been wrangled by the recession. Some freed-up credit card debt could help retailers like

Macy's

(M) - Get Report

J.C. Penney

(JCP) - Get Report

and

Best Buy

(BBY) - Get Report

-- Reported by Jeanine Poggi in New York

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