May 8th, 2010 
Amber Cook 
March saw consumer credit card debt continue to fall.
While people may have continued to pay off their credit cards, March saw an overall increase in consumer credit, according to a recent report from the Federal Reserve Board.
The Fed said consumer credit increased at an annual rate of 1 percent during the third month of the year after seeing a revised 3 percent drop the month before. Overall, consumer credit increased from $2.44 trillion to $2.45 trillion.
The increase in consumer credit was led by nonrevolving credit, which posted a gain of 3.9 percent. This type of credit includes student loans and those associated with boats and cars.
Meanwhile, revolving credit continued a slide seen since 2009, falling 4.5 percent at an annual rate in March. The majority of revolving loans are made up of credit card debt, and a decline indicates some consumers are managing to reduce what they owe.
Revolving credit fell from February’s $855.8 billion total to $852.6 billion. Given the debt management implications this have, some may take it as a positive sign. However, dips in revolving credit could also indicate more people are defaulting on their credit cards, forcing lenders to charge off these bad debts.
However, recent numbers from Fitch Ratings indicate consumers are improving in their efforts to pay down credit cards. The firm said charge offs fell 0.34 percentage points to 10.93 percent of accounts during the March payment period.
Delinquencies, which are a future indicator of charge offs, also declined during that time. Accounts that are 30 days late on payment fell to 5.74 percent, while cards 60 days overdue declined to 4.27 percent.
The recession caused many consumers to value managing credit card debt more wisely, especially in the face of increasing unemployment. Last year saw revolving credit drop 9.6 percent, according to the Fed.
Similar Posts:
- Consumer credit declines in May
- Late payments, charge offs on credit card accounts fall, Fitch reports
- March Debt
- Credit Card Defaults and Late Payments Drop with Top 6 Card Companies
- Consumer Debt Is Continuing To Shrink
Tags: Consumer Credit, Credit, Credit Cards