While much of the decline in outstanding credit reflects elevated charge-offs and tighter lending standards, consumer cautiousness about debt appears to also play a role. A significant net fraction of lenders still report reductions in credit card line availability, and the volume of new credit card offerings is only a fraction that of precrisis levels, which in turn leads to fewer new accounts.
At the same time, senior loan officers at commercial banks continue to report weak borrower demand for mortgages and for consumer loans. 8 The fact that consumers are shedding debt is not surprising, as households report a heightened awareness of their debt burden.