Though many consumers tried to rein in their credit card debt as a result of the financial problems brought on by the recent recession, the improving economy prompted many to increase their borrowing again in May.
The amount of consumer credit taken added during May rose 2.5 percent, driven largely by a huge increase in the amount of new credit card debt taken on, according to the latest monthly statistics from the Federal Reserve Board. In all, consumers borrowed 5.1 percent more on their credit cards than they did in the previous month.
This trend marked a stark reversal from the previous several quarters, and was the largest increase seen in three years, the report said. In all, credit card debt ticked up to $793.1 billion from April’s $789.8 billion.
Meanwhile, other types of consumer credit rose during the month by 1.3 percent, the report said. Now, the amount owed on installment loans nationwide stands at nearly $1.64 trillion.
Consumers may be feeling better about their own finances, prompting them to borrow more on their credit cards despite past troubles in paying their bills.