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Big Jump In Credit Card Debt Reflects Consumer Confidence

July 10th, 2013 · 1 Comment · Credit Cards

by Kristy Welsh

(Last Updated On: February 26, 2018)
Big Jump In Credit Card Debt Reflects Consumer Confidence

Non-revolving credit rose by 13 billion in May, but it was revolving credit (credit card debt) that really exceeded expectations, jumping 6.6 billion.

As goes consumer confidence in the job market, so goes the growth of revolving credit. So, with consumer confidence on the rise, it’s no big surprise revolving credit has followed suit. However, as reported by USA Today, the latest numbers reflecting outstanding credit in June do show a much greater jump than experts had projected.

In May, outstanding credit was projected to jump $12 billion. Instead it jumped a whopping $19.6 billion. Non-revolving credit (mortgages, auto loans, etc.) rose by 13 billion, but it was revolving credit (credit card debt) that really exceeded expectations, jumping 6.6 billion. As a result, the total outstanding credit owed by U.S. consumers is $2.838 trillion.

This growth in credit is likely linked to the Consumer Confidence Index, which was 73.4 in May, and 81.4 in June. However, another contributing factor is the loosening of standards among creditors. In the wake of the Great Recession, leery lenders pulled back considerably. But it seems that now, finally, the economy is seeing light at the end of the tunnel and creditors are looking to cash in.

At the same time, CNN Money reports that credit card delinquency rates are the lowest in over 20 years: “Delinquencies on bank-issued credit card accounts, which declined for six consecutive quarters, were less than half the record high of 5.01% set in 2009 and well below the 15-year average of 3.87%.” This would seem to further suggest consumers are getting a better handle on their financial lives, including those who are using credit cards to help with the credit repair process.

What about you? How are you feeling about the job market? Have you increased your outstanding credit of late? Why or why not?

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