updated 8/7/2009 3:07:15 PM ET 2009-08-07T19:07:15

The Federal Reserve says consumers paid down their credit cards and reduced other debt in June for the fifth straight month as they rebuild savings battered by the recession.

Major Market Indices

The Fed says Americans cut their outstanding consumer debt by $10.3 billion, or 4.9 percent, to $2.5 trillion in June.

The cut is much steeper than the $4.7 billion analysts expected and larger than the $5.4 billion drop in May.

Rising unemployment, declining home values and reduced stock portfolios have spurred Americans to spend less and save more.

That could slow any economic recovery, as consumer spending accounts for 70 percent of economic activity.

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Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.71%
$30K home equity loan FICO 5.26%
$75K home equity loan FICO 4.70%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.42%
Cash Back Cards 17.94%
17.94%
Rewards Cards 17.14%
17.14%
Source: Bankrate.com