Fed: Debt on credit cards continues to drop in March
People have continued a trend seen for some time now, as revolving consumer credit dropped in March, according to a report from the Federal Reserve Board.
On an annual basis, revolving credit – which consists mostly of credit card debt – fell 4.5 percent during the third month of the year. In all, revolving credit levels dropped from $855.8 billion to $852.6 billion.
Last year saw revolving consumer credit decline 9.6 percent, as did the first two months of 2010. January saw it dip 6 percent, while February witnessed an 8.4 percent drop.
Although a decline in revolving consumer credit could mean people are managing their credit cards more efficiently, the reverse may be true as well. When card issuers write off bad debt, it can show a decline in consumer credit levels.
Despite the 4.5 percent drop, overall consumer credit increased 1 percent in March. That rise was pushed by nonrevolving credit, which rose at an annual rate of 3.9 percent. This type of credit includes loans tied to automobiles, education and boats.
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