According to the Fed, overall consumer credit increased at an annual rate of 2.4 percent in January, compared to a 2.2 percent decline in December. In all, January showed $2.45 trillion in consumer credit outstanding.
The increase in the amount of consumer credit seems to have been driven by a rise in nonrevolving credit, which increased at an annual rate of 5 percent in January. The month before saw a 3.7 percent increase, while November posted a 7.7 percent decline. Total nonrevolving credit came in at $1.59 trillion for January and includes things like loans for cars and boats.
Though nonrevolving credit posted an increase, consumers continue to focus on trying to pay off their credit card debt. According to the Fed, total revolving consumer credit fell at an annual rate of 2.3 percent in January, ending at a total of $864.4 billion. Revolving consumer credit has been dropping every month for over a year now. In fact, 2009 saw it fall by 9.6 percent, the Fed report shows.
Though January did show a drop in revolving consumer credit, the 2.3 percent decline was not as drastic as previous declines. For example, December saw revolving consumer credit drop at an annual rate of 12.9 percent, while November saw it plummet at an 18.5 percent rate.
Though a drop in revolving consumer credit may be taken as a positive sign in the form of people paying off their credit card debt, it also can have a negative connotation. A drop in revolving debt outstanding could also mean that banks had to charge off of what is owed to them as customers find it hard to pay off their credit card debt.
Similar Posts:
Recent Comments