Consumer credit card debt drops for first time in months
The struggling job market and slumping consumer confidence may have been what led fewer Americans to take on credit card debt during the month of July.
Consumers’ revolving credit – the type most commonly associated with credit card debt – fell for the first time in months in July, falling 5.2 percent to a total of $792.5 billion, according to the latest monthly consumer credit report released by the Federal Reserve Board. That’s down from the totals seen in both May ($793.3 billion) and June ($795.9 billion), and is more in line with debt totals seen at the end of the first quarter, which stood at $792.8 billion.
However, even as consumers used their credit cards less often, they also took out more nonrevolving credit – installment loans such as those for mortgages and new cars – the report said. In all, revolving credit jumped 11.2 percent in July to a total of more than $1.66 trillion.
Many consumers are now more wary of taking on credit card debt because of the way high balances affected their finances during the recent national recession.