Consumer Credit Gains $6.1 Billion in December 2010

Consumer Credit Gains $6.1 Billion in December 2010

photo of hand holding credit card

U.S. consumers took on more debt for the third straight month in December, according to Federal Reserve data released in February. Consumer credit outstanding increased at a 3 percent annual rate and was up $6.1 billion from November 2010, the report said. Consumer credit had been declining for 20 straight months prior to recent gains.

Consumer confidence, spending help boost credit
Revolving credit, which is largely made up of credit cards, rose $2.3 billion in December 2010 from the previous month, said the report. December's 3.5 percent annual gains in revolving credit were the first in more than two years. Nonrevolving credit rose 2.8 percent in December 2010, or $3.8 billion on an annualized basis. This category, which includes loans for vehicles, education, and vacations, has been growing for five consecutive months, said the report.

Total consumer credit outstanding for 2010 topped $2.4 trillion in December, a 1.6 percent annual decline and a significant improvement from 2009, when consumer credit dropped 4.4 percent—the largest decline since records began in 1942.

Spending patterns mirror activity seen elsewhere
The most recent consumer credit data support the findings of the January Senior Loan Officer Opinion Survey conducted by the Federal Reserve. In the survey, banks reported easing some of the tighter lending standards observed during the financial crisis.

February 25, 2011