November Consumer Credit 11% Greater than Last Year

The Federal Reserve's most recent G-19 Consumer Credit report states that revolving credit (like credit card debt) for November increased at an annual rate of 11.5%. This is a jump from October's increase of 8%, the 2006 growth rate of 6.3%, and 2005's rate of 3.1%.

The total was $937.5 billion, or $3,205 of credit card debt per person, or $8,012 household (assuming an average of 2.5 persons per household, or 117 million households). This is in addition to the $1.567.9 trillion in non-revolving credit, like auto loans, which increased 5% over last year. Total debt in the U.S. is $2.5 trillion, a 7% increase over last year.

The declining housing market has caused many families to switch from home equity loans to credit cards to finance purchases. In addition, the Bankruptcy Abuse Prevention Act of October 2005 has prevented many indebted families from filing for bankruptcy, further inflating the credit debt figures.

Personal consumption drives 70% of the U.S. economy. If this were to falter, so would the bulk of our entire economy.

What It Means to You

A softening economy coupled with rising credit card debt is a good time to reduce your financial vulnerability. Consult with your financial planner and develop ways to reduce your own credit card debt....and avoid becoming a statistic in the Federal Reserve’s G-19 report next month.

Related Articles

• Chicago Federal Reserve web site How to Budget
• Making a Plan to Reduce Credit Card Debt
• More Resources for Reducing Credit Card Debt