Research and Statistics

Credit card balances fall sharply, Fed says


Credit card balances declined in February, according to the latest Federal Reserve data, as consumers avoided making all their purchases on plastic even as mounting job losses curtailed incomes.

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

See later story:Credit card balances suffer biggest percentage drop in 31 years

Credit card balances declined in February, according to the latest Federal Reserve data, as consumers avoided living off of plastic even as mounting job losses curtailed incomes.

Those falling card balances were outlined in today’s release of the Fed’s monthly G.19 report on consumer credit. The report showed revolving credit — a category of loans made up almost entirely of credit card debt — dipped by 9.7 percent in February. Overall, revolving debt fell to $955.7 billion from a total of $963.5 billion in January. Meanwhile, nonrevolving credit increased 0.2 percent in January to $1.608 trillion. That section of the consumer credit report includes a variety of types of lending, primarily auto loans, student loans and loans for mobile homes, boats and trailers.

In all, consumers shouldered $2.564 trillion in total debt in February. That marks a decrease from a revised January figure of $2.571 trillion, previously estimated at $2.564 trillion.

Experts say job losses have not yet forced consumers to begin charging their day-to-day costs. Although the latest jobs report showed unemployment reached 8.5 percent in March — a 25-year high — experts say credit cardholders have yet to feel the full impact of the troubled labor market. “The real financial stress of increasing unemployment will take another few months to really show up in credit card balances,” says Tony Plath, professor of finance at the University of North Carolina at Charlotte. “Since the unemployment number just spiked in the last two months, people won’t start charging necessities until they run out of cash a few months into the unemployment cycle,” he says.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

What’s up next?

In Research and Statistics

FDIC: Overdue loans on the rise

FDIC data show that every state experienced an increase in unpaid loans from 2007 to 2008. Use this graphic to find out how your state performed.

See more stories
Credit Card Rate Report
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more