First Reported Increase in Credit Card Debt Since August '08





Credit Card Debt on the Incline Again - IllustrationAccording to the Federal Reserve, total revolving consumer credit outstanding in the United States ticked higher in December 2010 for the first time in 27 months.

According to the Fed, total outstanding consumer credit in the United States in December of 2010 was $2.41 trillion. Of this total, $800.5 billion was in revolving credit (credit cards mostly), while the remaining $1.61 trillion came in the form of non-revolving credit (car loans, etc).

In November of 2010, the Fed reported that total outstanding revolving consumer credit was $798.2 billion. This means that outstanding consumer revolving credit finally ticked higher after a 2+ year steady decline.

In August of 2008, the Fed reported that there was a total of $973.64 billion in total outstanding consumer revolving credit in the country. It was extremely easy to qualify for credit cards back then, and many people were taking full advantage. This led to a surge in outstanding credit card debt that topped out in August of 2008.

In the fall of 2008, things started falling apart. The collapse of Lehman Brothers ushered in an incredibly chaotic couple of years for the global economy. Credit markets tightened, and suddenly the gusher of easy credit slowed to just a trickle.

Outstanding revolving credit balances in the United States fell from September of 2008 through to December of 2010. In August of 2008, there was over $973.6 billion in total outstanding revolving credit in the country - by November of 2010, this figure had dropped to less than $800 billion.

Let's take a look at the progression of the revolving credit numbers from Sep '08 until Dec '10:

Sep '08 - $973.4 billion
Oct '08 - $968.35 billion
Nov '08 - $963.4 billion
Dec '08 - $957.5 billion
Jan '09 - $956.1 billion
Feb '09 - $944.8 billion
Mar '09 - $936.3 billion
Apr '09 - $929.2 billion
May '09 - $921.7 billion
Jun '09 - $914.9 billion
Jul '09 - $909.9 billion
Aug '09 - $901.9 billion
Sep '09 - $893.5 billion
Oct '09 - $885.7 billion
Nov '09 - $874.5 billion
Dec '09 - $865.8 billion
Jan '10 - $856.7 billion
Feb '10 - $846.7 billion
Mar '10 - $840.7 billion
Apr '10 - $830.2 billion
May '10 - $828.3 billion
Jun '10 - $825.4 billion
Jul '10 - $820.1 billion
Aug '10 - $814.9 billion
Sep '10 - $806.1 billion
Oct '10 - $801.5 billion
Nov '10 - $798.2 billion
Dec '10 - $800.5 billion






It will be interesting to see the trend in outstanding revolving consumer credit if the US economy continues to recover as anticipated over the coming months and years. Will Americans start to whip out their credit cards with the same unbridled enthusiasm that they did before the "Great Recession", or have consumers in the country been permanently transformed into frugalists?

Source: FederalReserve.gov - Historical Consumer Credit Outstanding




Filed under: General Market News

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