Consumer borrowing surges in March
A Federal Reserve report shows that consumer borrowing surged in March 2007 as U.S. consumers charged more purchases to their credit cards and took out additional car loans.
Overall, outstanding consumer credit climbed at a 6.7 percent annual rate, or $13.5 billion, in March, for the biggest rise since a 10.2 percent advance in November. Consumer credit strengthened by an upwardly revised $5.6 billion in February.
The March surge boosted total consumer debt to a record $2.43 trillion.
The result suggests that consumers are remaining resilient despite higher energy prices and a housing slump.
The use of revolving credit, mainly credit cards, spiked 9.2 percent in March on the heels of a 2.9 percent increase in February.
Meanwhile, nonrevolving credit jumped 5.2 percent in March, up from a 2.7 percent gain in February. Nonrevolving credit is used to finance such things as cars, vacations and education.
Analysts explained that in order to keep spending, consumers may be turning to credit cards amid tapped-out home equity loans and declining real estate values.
Also, economists cited low unemployment as a catalyst for consumer spending, which makes up two-thirds of economic growth.
- Late payments on cards worsen as balances rise, NY Fed says – Growing card balances are weighing heavier on consumers' budgets, New York Fed report shows, but problems remain low historically ...
- Fed: Card balances rose by $5.1 billion in December – Card balances rose to a new all-time high in December, according to the Federal Reserve ...
- San Antonio tops list of cities with heaviest card debt burden – San Antonio residents would take the longest time to pay off credit card debt relative to income compared to other major U.S. cities, a CreditCards.com analysis found. By contrast, San Francisco and Minneapolis residents would take the shortest ...