Consumer Credit Grows as Card Use Drops
The amount of money Americans owed to lenders rose through the end of September, leading to a sizeable increase in consumer credit even as debt on credit cards fell for the third month in a 
row.
Consumer credit levels increased by a total of 3.6 percent in the month of September after falling more appreciably in August, according to the latest monthly consumer credit report from the Federal Reserve Board. In all, consumers owed all lenders a total of more than $2.45 trillion through September, up from the more than $2.44 trillion seen at the end of August, when the rate slipped 4.7 percent.
This change was largely driven by an increase in the amount consumers owed on nonrevolving credit - that is, installment loans such as those for auto purchases or education costs, but not mortgages - the report said. Nonrevolving credit jumped 5.8 percent in September to a total of more than $1.66 trillion. That's up considerably from the more than $1.64 trillion seen at the end of the second quarter and nearly $1.59 trillion seen through the end of the third quarter last year.
Meanwhile, the amount consumers owed in revolving credit - debts that can be subtracted from or added to from one month to the next, and which is therefore most often associated with credit cards - slumped for the third straight month, the report said. In all, consumers cut their credit card debt to a national total of $789.6 billion, down from the $790.2 billion seen in August. That's also 3.2 percent less than the total of $795.9 billion seen at the end of the second quarter.
Consumers have drastically changed their credit card borrowing habits since the onset of the recent national recession, taking significant steps to both scale back the amount they borrow and increase the value of their monthly payments into their outstanding debts. That trend has continued since the end of the recession, as every one of the nation's top lenders have seen instances of both delinquency and default slip considerably during that time. However, credit card use - and therefore the amount owed on these accounts - might increase again in the coming months, as the holiday season usually induces consumers into breaking their habits somewhat for gift purchases.
5-7-2012
by Chris Martin
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by Dan Seitz
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