U.S. consumer credit card balances rose slightly in October, which could be a harbinger of heavier credit card use over the holidays, one expert suggests.
Consumer revolving credit, 98% of which is credit card debt, increased by $300 million in October to $792.3 billion, up 0.04% from $790 billion in September, according to preliminary G.19 data the Federal Reserve Board released Dec. 7.
The one-month increase is “not enough to reverse the trend” of consumers generally relying less on credit, but it could be welcome news for issuers whose portfolios have been shrinking in recent months, Dan Geller, senior vice president at San Anselmo, Calif.-based Market Rate Insights Inc., tells PaymentsSource.
“Certain retailers also reported higher sales and foot traffic in November, and it’s likely that some of that spending went onto credit cards,” Geller says.
Revolving debt generally has declined over the past two years as consumers increasingly have paid down credit card balances and steered away from taking on fresh debt following the recession, economists say (
Consumers continue to be cautious in their spending as the economy slowly recovers, Geller says.
“The increase in October shows a bit of a change in consumers’ credit behavior, but we will have to wait to see if it’s just seasonal,” he says.
