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The latest consumer credit data from the U.S. Federal Reserve suggests that lending remains tight and consumer spending continues to be sluggish.
Revolving credit, 98% of which is credit card debt, decreased 0.67% in July, to $905.6 billion from $911.7 billion the previous month, according to the Fed's G.19 report on consumer credit released yesterday. Nonrevolving credit, such as auto loans, decreased 97 basis points, to $1.57 trillion. A basis point is one-hundredth of a percentage point.
Total seasonally adjusted consumer credit outstanding, which includes revolving and nonrevolving credit, decreased at an annual rate of 10.5% in July, to $2.47 trillion, the report states.
The charge-off rate for outstanding prime credit card receivables also declined in July, ending five consecutive months of record highs, according to Fitch Ratings Inc. Charge-offs on prime credit card portfolios decreased to 10.55% of total prime card receivables in July, 24 basis points lower than the 10.79% rate the previous month.
Though charge-offs typically increase in the fourth quarter of each year, Fitch says it seems less likely this year because delinquencies have been somewhat stable over the past six months.
