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Charge Card Use Up As Credit Rises

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The Associated Press

Published: September 11, 2007

WASHINGTON - Consumers kept charging at a rapid pace on their credit cards in July although their overall borrowing slowed a bit.

The Federal Reserve reported that consumer credit rose at an annual rate of 3.7 percent in July, down from a 5.9 percent growth rate for consumer debt in June.

The slowdown reflected a big drop in borrowing in the category that includes auto loans. The category that includes credit cards saw an increase as consumers continued to turn to their credit cards to finance purchases now that home equity lines of credit are becoming harder to obtain.

Total consumer credit rose by $7.5 billion in July, below the $9.5 billion increase economists had been expecting and was below the actual increase of $11.9 billion in June.

July's gain still pushed consumer debt to a record high of $2.456 trillion. The Federal Reserve does not include loans secured by real estate, such as mortgages, in its measurement of consumer debt.

Revolving credit, the category that includes credit cards, rose at an annual rate of 6.6 percent in July, the third consecutive big monthly gain. Revolving credit had been up at a rate of 6.4 percent in June and 10.9 percent in May.

Nonrevolving credit, the category that includes auto loans, rose at a modest rate of 1.9 percent in July after having risen at a 5.6 percent rate in June and a 5.5 percent rate in May.

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