The Federal Reserve Board released new data Wednesday showing that consumers pay off far less credit card debt every month than previously thought.

Data for the past three years indicate that card balances equaling 9% of total outstandings were paid off before interest accrued. This represents so-called "convenience use" of credit cards, which means consumers buy products with credit cards because it is easier than using cash. They then pay off the purchases when bills arrive, avoiding finance charges.

Charles A. Luckett, a senior economist at the Fed, said most economists assumed the percentage of convenience users had grown dramatically during the past few years as consumers began charging groceries and other necessities to earn frequent flier miles and discounts on new cars.

"My expectation was that it was getting bigger and growing," he said. "But there does not seem to be any upward movement of any significance. That is surprising."

"Contrary to expectations, convenience use is not as high as thought and is remarkably stable," agreed Donald P. Morgan, an economist at the Federal Reserve Board of New York.

Mr. Luckett said he believes the numbers are flat because debtors also are charging more to earn free trips and discounts. This means their balances have increased, off-setting the rise in credit card use by people who pay their debts off every month.

Some economists questioned the new number. Lawrence Chimerine, managing director of the Economic Strategy Institute and a consulting economist to MasterCard International, said much of the increase in convenience use occurred before 1994, the year Mr. Luckett began collecting data.

The data, unveiled at a consumer debt forum sponsored here by MasterCard International, means banks are earning interest on 91% of credit card balances.

That's good news for lenders, said James H. Chessen, chief economist at the American Bankers Association. "There doesn't appear to be any increase in the use of credit cards from a convenience standpoint, which means there is more income being produced for banks," he said.

Mr. Luckett said the Fed compiled the data from its periodic survey of credit card interest rates. Economists subtracted balances subjected to a finance charge against those balances covered by the grace period. They then converted the number into a ratio.

The Fed found that the ratio varied little in year-to-year comparisons. For example, it stood at 9.4% in November 1996, 9% in November 1995, and 9.3% in November 1994. They also found that the percent of debts paid off dropped in February during all three years, most likely because consumers were carrying holiday debt on their cards.

During the MasterCard forum, economists disagreed on why consumer credit was at record highs. Consumer installment credit stood at 21% of disposable income in the first quarter of 1997, down only slightly from its record high in the fourth quarter of 1996.

Mr. Morgan argued that more consumers than ever are in the prime borrowing ages of 25 to 54. These people are borrowing now in the expectation that their incomes will rise enough to cover the debts, he said.

Lenders should expect consumer debt levels to rise even further, he said, because the Census Bureau predicts the percent of the population in their prime borrowing years will peak in 2000.

Mr. Chessen, however, credited the strong economy for rising debt levels. He argued that consumers are so confident that the economy will expand that they are willing to borrow more. u

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