Card Spending Sends Consumer Credit Higher

Consumer credit rose at an annual rate of 6.5 percent in June, with revolving credit jumping 8.4 percent, according to the monthly Consumer Credit Outstanding report yesterday from the Federal Reserve.

Revolving credit, which covers credit card loans, rose a strong 12.2 percent in May, according to revised figures for the report, also known as the G. 19, from the Fed. Nonrevolving credit rose 5.3 percent in June, following a revised 5.3 percent increase in May. Nonrevolving credit includes auto loans, and loans for mobile homes, education, boats, trailers and vacations.

The jump in credit card debt may be due to the continuing slide in the mortgage market, according to some economists. Consumers had been taking out home equity loans to finance their spending, and leaving their credit cards at home. That has changed as lenders restrict loans due to the failure of mortgage firms catering to subprime consumers and others, economists theorize.

Total consumer credit in June stood at $2,459 trillion, up $13.2 billion from May, with revolving credit at $903.9 billion, up $6.3 billion, and nonrevolving credit at $1,556 trillion, rising of nearly $7 billion. Consumer credit doesn’t include mortgage debt.

The average APR for all credit card accounts was 13.46 percent in May, up from 13.41 percent in the first quarter, the Fed reported. The June average wasn’t available.