Credit Card Debt Reaches Record While Consumer Borrowing Pace Slows
8/8/2017 9:06:00 PM
The Federal Reserve's Consumer Credit report data on overall borrowing shows downward trends compared to May.
Consumer borrowing increased at a slower pace in June, however the total outstanding debt for credit cards reached a high of $1.027 trillion, according to media reports and data in the Federal Reserve’s latest Consumer Credit Report.
Bloomberg reports the level of revolving debt, mostly for credit cards, shown in the report for June is the highest since before in the 2008 recession.
Overall, total consumer borrowing for credit cards, auto loans and student loans in June increased by $12.4 billion compared to a revised $18.3 billion increase for May, which was the highest jump in several months. The total June increase is also less than economists’ predictions for the month.
MarketWatch reports economists estimated a $16 billion increase in total borrowing in June.
Nonrevolving debt, including student loans and auto loans, increased $8.2 billion, according to the Fed’s report. Revolving debt increased by $4.1 billion in June compared to $6.9 billion in May.
The Fed’s report also shows consumer borrowing for credit cards, student loans and auto loans increased at a seasonally adjusted rate of 4.5 percent. Revolving credit and nonrevolving credit increased at similar rates.
According to MarketWatch, economists expect spending to fuel growth in consumer credit the rest of this year.
And, Matt Schulz, CreditCard.com’s senior industry analyst, told CBS News that credit card balances could continue to increase.
“America’s credit card balances have never been higher, but there’s no reason to think they won’t just keep climbing,” Schulz said. “Combine that with steadily rising interest rates and you have a potentially volatile mix.”
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