Consumer Credit Increases for the 7th Consecutive... - Other News

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » Consumer Credit Increases for the 7th Consecutive Month

Consumer Credit Increases for the 7th Consecutive Month

Consumer Credit Increases for the 7th Consecutive Month
The content is accurate at the time of publication and is subject to change.

April marked the seventh month in a row that U.S. consumers took on additional debt, reflecting a big rise in non-revolving credit such as auto loans and student loans for the month. The Federal Reserve released the report June 7, showing a rise of $6.25 billion in April consumer credit. While the total amount of money that U.S. consumers borrow continues to increase, consumers are cutting back their spending on credit cards. Revolving credit fell $1 billion in April, after a small increase in May of $0.1 billion.

Prediction versus Reality

The economists at Credit-Land.com had reported an increase in revolving credit applications which concurred Wall Street forecasts that U.S. consumer debt would increase in April by $5.33 billion. With the increase coming in at $6.25 billion, consumers took on more debt than even Wall Street economists expected.

Non-revolving debt soared $7.2 billion in April compared with an increase of $4.8 billion in March. These same economists also attribute the increase in debt to the fact that consumers are experiencing tough economic times as opposed to the economic environment improving.

According to a representative from Wells Fargo Securities, “What appears to be a turnaround in the credit cycle is mostly an increase in student loan debt as people go back to school to improve skills amid high unemployment and as state budget cuts push up tuition.”

Federal Reserve Makes a Correction

The Federal Reserve also corrected the numbers for March. The Fed says that the amount of debt increased by $4.82 billion in March, a downward revision from earlier reports.

Consumers Still Avoiding Credit Card Debt

The twist on incurring debt is that U.S. consumers seem to be avoiding credit card debt. According to the Fed, credit card debt decreased by $943.5 million in April after a $36.7 million credit card balance increase in March. Financial and credit experts suggest that the decrease in credit card balances indicates that U.S. consumers are still wary of incurring this type of debt as opposed to taking on debt in the form of student loans and vehicle loans. Consumers are also trying to cut back on spending in the face of increasing gas and food costs.

Another factor that could be affecting credit card debt is the decline in disposable income. Government data last month showed that U.S. disposable incomes, when adjusted for inflation, fell for a second straight month in April. Higher prices for staples such as food and gasoline are taking a big bite out of consumers’ budgets and leaving a lot less for discretionary purchases.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

Sephora’s First Credit Cards Coming Soon
Sephora’s First Credit Cards Coming Soon

Posted: March 22, 2019

People who shop at Sephora maybe happy to find out that during the coming months the beauty chain will be launching three new credit cards – the Sephora Credit Card, Sephora Visa Credit Card and Sephora Visa Signature Credit Card. This is… Continue reading

New Categories for Chase Freedom Cardholders
New Categories for Chase Freedom Cardholders

Posted: March 21, 2019

Four times a year people with the Chase Freedom Credit Card can earn enhanced rewards in key areas, and they have just announced the new categories. This coming quarter cardholders earn 5% cash back when they shop for groceries or at a… Continue reading

Mastercard Set to Buy Ethoca
Mastercard Set to Buy Ethoca

Posted: March 20, 2019

Credit Card security is something that everyone is mindful of these days, and in keeping with this theme, Mastercard is set to buy Ethoca, a company that specializes in helping both retailers and card issuers detect and resolve digital… Continue reading

Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate.
For Excellent, Good Credit
INTRO OFFER: Discover will match ALL the Miles you've earned at the end of your first year, automatically. For example, if you earn 30,000 Miles, you get 60,000 Miles. That's $600 towards travel!
For Excellent, Good Credit
Earn unlimited 1.5% cash back on every purchase, every day
For Average, Fair, Limited Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!