ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. 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. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » Consumer Debts In April Trend Northward By $1 Billion

Consumer Debts In April Trend Northward By $1 Billion

June 27, 2010 | Updated on June 27, 2010
Add to Favorites:
The content is accurate at the time of publication and is subject to change.

The report by the Federal Reserve that was released on Monday clearly details that the despite the balances on the credit cards plummeting for the nineteenth month consecutively, consumer debts continued to grow and increased by $1 billion for the month of April.

All aspects of credit in the United States, except for loans on real estate, there was a growth of $1 billion and the debts currently stand at $2.44 trillion. This accounts for an annual growth percentage rate of 0.5%. This the second instance of economic growth being noticed within the last fourteen months.

After reaching the peak in July 2008, the outstanding debts fell by 5.5%. The debts will trend down south if the banks write off uncollectible debts or if the borrowers make payments that go towards the principal amount. In the first quarter of this fiscal year, based on the data made available earlier, the charge off amount stood at $21.6 billion. This is a significant increase as compared to the charge off amount of $12.9 billion in the final quarter of 2009.

MFR Inc`s chief economist, Josh Shapiro, wrote that there is still a long way for the debts in real estate sector to show a comeback. An economist, Gary Bigg, who works for Merill Lynch that is a part of Bank of America mentioned, "High levels of unemployment, tight credit conditions and balance-sheet restructuring will restrain consumer credit in the months ahead"

Marketwatch surveyed a few financial experts and they mentioned that they were looking forward for the consumer debts to increase by $2 billion.

There was a 12% dip noticed in the revolving credit segment that includes the debts on credit cards. The revolving credit came down by $8.5 billion and in the month of April, the figure stood at $838 billion. This was the nineteenth consecutive month that there was a dip noticed in the revolving credit segment.

On the contrary, the non revolving credit segment rose by 7.1%. Personal loans, student loans and auto loans are the ones that come under the non revolving credit segment. In the last 5 months, this is the fourth time that this segment has shown an increase. After peaking two years ago in 2008, there was a dip of 0.4% noticed in the outstanding balances in this segment.

After increasing to $5.3 billion in the month of March, the federal government debts, of which student loans are an integral part, increased by $1.7 billion in the month of April.

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:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
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!