Consumer borrowing rose in November for a second consecutive month, led by an increase in non-revolving credit - including student loans held by the government, according to a Federal Reserve G.19 report on consumer credit released Friday.
Non-revolving loans, which also include auto financing, rose $5.6 billion - an increase led by an unadjusted $3.6 billion rise in federal government lending for education. The report does not track debt secured by real estate, such as home equity lines of credit.
Total outstanding credit climbed by $1.4 billion in November to $2.403 trillion after increasing a revised $7 billion in October, according to the Fed report.
Revolving credit, 98% of which is credit card debt, fell to $796.5 billion from a revised total of $800.7 billion in October, meaning U.S. credit card borrowers shed $4.2 billion in debt in November.
Credit card loans at least 30 days overdue fell to 4.38% in November, the lowest percentage in nearly three years, according to a Moody’s report released last month. The top six U.S. credit card issuers, including JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc., all reported lower delinquencies for the month. Write-offs rose at JPMorgan and Capital One Financial Corp. and fell at the other four companies.
Americans are spending more. Holiday purchases jumped 5.5 percent, the best performance since 2005, MasterCard Advisors’ SpendingPulse said Dec. 28. The group measures retail sales by all payment forms and includes Internet purchases.
As credit card portfolio health continues to improve and consumer spending gradually picks up, card issuers are poised to see the first increase in overall credit card receivables next year, Moody’s Investors Service predicts in a report released last month, see story.