Consumer Credit Gains in January Led by Cards

Consumer credit in the U.S. rose at an annual rate of 0.8 percent in January, somewhat unexpectedly. The gain was driven by an increase in credit card spending following three straight months of declines.

Total consumer credit outstanding increased $1.76 billion in the first month of 2009, or at an annual rate of 0.8 percent, according to data released by the Federal Reserve late Friday. The Fed’s monthly consumer credit report, called the G.19, does not include debt backed by real estate.

Revolving debt, like that associated with credit cards, expanded at a 1.2 percent annual rate in January, with American consumers adding nearly $1 billion to card balances in the month. In December, revolving credit contracted at a blistering 9.5 percent rate. In the fourth quarter of 2008, credit card debt fell by 6.7 percent.

Non-revolving debt, such as auto and student loans, increased at a 0.6 percent annual rate in January. In the fourth quarter of 2008, non-revolving debt contracted at a 1.1 percent rate.

Total consumer credit outstanding in the U.S. was $2.564 trillion at the end of January.