New statistics from the Federal Reserve released yesterday indicates that Americans used their credit cards less in July 2013, while consumer borrowing made another $10 billion-plus gain that month.
According to the Fed’s analysis, American consumers spent less on credit card purchases for the second straight month, while redirecting their expenditures to student or automobile loan payments.
The statistics in general may be indicative of a muted economic growth, as well as more conservative spending patterns for Americans in general.
All told, credit card borrowing dropped by $1.8 billion to about $850 billion in July – this came after a $3.7 billion downtick in credit card debt in June. As for consumer borrowing, that increased by $10.4 billion in July, a mild slowdown from the $11.9 billion gain in June.
Borrowing is now at an all-time high of $2.85 billion following July’s uptick, while auto and student loan borrowing increased $12.3 billion in July to $2 trillion, also a record.
Compared to last year, auto and student loan borrowing is up 8.1 percent, and has increased in all but one months since May 2010. Credit card debt, on the other hand, is 17 percent below its all-time high in July 2008, back when the global economic recession was in full swing.
As average wages have not improved much and neither have employment prospects, the Fed’s statistics suggest consumers are more conservative when it comes to using “plastic”, while more eager to return to school or purchase a new automobile, hence taking advantage of the improved economic conditions.