Balances On Consumer Credit Cards Bumped Up During November
Numbers released by the Federal Reserve showed that consumer credit card balances rose in November for a third consecutive month as Americans went into the holiday season with their plastic pulled out and ready to spend. However, many were hesitant to overspend despite a decrease in the nation’s unemployment rate.
The Federal Reserve released data which indicated that consumer credit card balances rose all throughout November for the third month in a row. According to the most recent G.19 consumer credit report, there was an 8.5% increase in the amount of revolving debt as more and more individuals opted to spend using their credit cards. Overall for the month of November, revolving debt across America swelled by $5 billion to a grand total of $798.3 billion. Nearly all the revolving debt accounted for in the report is comprised of credit card debt.
One senior economist at the world’s biggest economics organization HIS Global Insight said that the latest G.19 results indicate an improved attitude throughout American Households on the topic of finances and the economy which make them more comfortable with pulling out their credit cards at the register. This particularly rings true in the month of November leading into the holidays when people are programed to go into spending mode. “It’s a month where you kick off the sales for the holiday season,” the expert said.
Included in the G.19 report which is released by the Fed on a monthly basis is non-revolving debt such as home loans, auto loans and student loans. November saw an increase in non-revolving debt as well, which soared some 10.7% to $1.68 trillion. As a whole consumer credit, which combines both revolving and non-revolving debt, grew by 9.9% in November to $2.48 trillion. This was the third straight month for this increase, as well.
The National Retail Federation noted a four-and-a-half percent jump in year-over-year consumer spending during November, which caused them to plump up their overall holiday spending estimates.
“Consumer spending this season has surpassed expectations,” said Jack Lleinhenz, The National Retail Federation’s Chief Economist in a statement released by the company.
He went on to say that, “Many shoppers continue to stick to their budgets and buy only what they need.”
Indeed, many experts note that the overall spending by consumers was modest at the end of 2012 which signifies that a majority of shoppers opted not to spend more during the holiday season than they could afford.
It’s worth noting that the unemployment rate also dipped in November to 8.6% which is the lowest figure since March of 2009.