Credit card debt falls again as consumers pare back
Americans continued to cut back their credit card balances in June, trimming overall consumer debt for the 19th time in the last 21 months.
But the drop was well below expectations, suggesting that economists might have become overly gloomy about consumers’ finances -- or that frugality in some households took a bit of a breather.
Total consumer credit outstanding in June fell $1.3 billion from May to a seasonally adjusted $2.42 trillion, the Federal Reserve said in a report.
The total measures all consumer loans outstanding other than mortgages and other debt secured by real estate.
Credit card debt slid $4.5 billion to a seasonally adjusted $826.5 billion in June. Card debt has dropped 13.3% since the end of 2008, when it stood at $958.1 billion.
Many consumers have been whittling away at high-cost credit card balances since the recession hit in 2008. Some haven’t had a choice, as banks have canceled cards or sharply pared credit limits.
But loans for cars, education and other purposes increased $3.2 billion in June to $1.592 trillion. That category of credit is down less than 1% since the end of 2008.
The overall $19.6-billion decline in consumer debt in the second quarter accelerated from the $10.7-billion paydown of the first quarter.
That was consistent with other reports pointing to a slowdown in consumer spending in spring.
Personal consumption rose at a 1.6% annualized rate in the second quarter, down from a 1.9% rise in the first quarter, government data show.
-- Tom Petruno
Image: Mark Lennihan / Associated Press