Revolving credit creeps toward $1 trillion
The latest Federal Reserve report on consumer credit shows that consumers accelerated their use of credit cards in January 2008.
Consumer use of revolving credit (which includes credit cards) surged at an annual rate of 7 percent during the first month of the year, up significantly from a 2.8 increase in December. That pushed the total amount of revolving credit to $947.4 billion. In December, total revolving credit stood at $941.8 billion.
As a whole, consumer credit (revolving and nonrevolving) rose at an annual rate of 3.3 percent in January to $2,524.5 billion.
This news, contained within the G.19 Consumer Credit report, comes against a backdrop of reports (including data from the Fed itself) showing that consumers had more difficulty paying back their credit card debt in recent months.
Despite the ongoing credit crunch, consumers should avoid taking news of this latest increase in credit card use as another sign the apocalypse has just inched closer, since the Fed’s report on consumer credit is often volatile and subject to significant revision.