Consumer credit plunges as recession forces debt cutback

Whether it's by choice or out of necessity, U.S. consumers are cutting back on borrowing like never before, according to Federal Reserve data.

Financially hobbled banks are reluctant to lend. And with unemployment rising and housing prices still falling, consumers are hesitant to borrow. Those forces are combining to push credit card balances, auto loans and other forms of consumer credit lower by a whopping $21.6 billion in July, the biggest decline on record.