Increase shows consumers’ financial confidence in borrowing and spending.
9/12/2019 11:00
The Federal Reserve’s most recent data reveal that July’s credit card debt surged to a rate most often associated with the holiday shopping season.
“As far as American's finances are concerned, the current situation is not too encouraging,” said Jill Gonzalez, senior analyst at personal finance platform WalletHub, told NBC News. “We started the year owing more than $1 trillion in credit card debt, and although we paid off a large chunk in the first quarter, that could be a sign that more debt will be taken on by consumers."
The Fed’s monthly consumer credit report shows revolving credit increased 11.25% in July.
“In terms of revolving debt, we see spikes like this every so often, but they don’t jump by double digits all that much,” said Matt Schulz, chief industry analyst at CompareCards, in the article.
Bloomberg reports the July credit increase is the highest since late 2017. The monthly increase in total credit tracked by the Fed, $23.3 billion, exceeded the expectations of economists surveyed by Bloomberg.
Revolving debt, including credit cards, increased by $10 billion, which is the highest since November 2017, according to Bloomberg. Non-revolving debt, including student loans, increased $13.3 billion in July after a $14 billion surge the previous month.