According to RateWatch, a digital financial media leader, the borrowing power of the average American consumer increased for the six consecutive month in June, 2011. The company’s Credit Power Index (TM) showed improvement in June as certain adjustable rate mortgage interest rates dropped, as well as those for auto loans, inclusive of New Jersey car loans.

The average rate for a five-year adjustable rate mortgage dropped to 3.41%, the lowest mark since 2007. Rates for 48 month new auto loans made their way down to 4.61%. The drop in loan rates outweighed declining deposit rates, so June was a good month for American consumers, even those with bad credit. The Credit Power Index measures the difference between deposit and borrowing rates. When that gap closes, American consumers have more borrowing power.

Unfortunately, there is a flip-side. When banks are charging less on bad credit car loans in NJ, they have to pay less in interest to stay profitable. That is what most banks are doing right now. Interest on loans are at 2007 levels and interest on deposits are lower than they were in 2007. Every ying has its yang.