Americans may be feeling better about their finances, but the amount of credit card debt they owe to financial institutions fell for the second straight month in February.
Consumer borrowing increased overall in February, but revolving credit – the type associated with credit card debt – fell 4.1 percent during the month, according to the latest monthly statistics from the Federal Reserve Board. Currently, consumers owe roughly $794 billion to credit card lenders, down from the $796.7 billion observed in January. This was also the second consecutive month of drops, as January’s total was a 5.1 percent decline from December.
However, consumer credit rose 7.7 percent overall as more people took on nonrevolving debt – typically associated with loans for big-ticket items like cars and homes, the report said. This figure has been steadily rising for several months as consumers continue to get a better handle on their finances.
In the past, experts may have attributed continued declines in credit card debt to charge offs, but even these have dropped appreciably in recent months.