Credit Card Use, Overall Consumer Credit Slows in April

Not only did U.S. households slow down on borrowing and credit card use, credit card users have started to more aggressively pay down their credit card debt.

According to the Chicago Tribune, reporting on the Federal Reserve, “Consumer borrowing rose at an annual rate of 1.3 percent in April, to $2.6 billion, the smallest increase since October. That’s down from a 7 percent jump in March.”

Economists had been expecting some slowdown, but were surprised that the rise in total debt was far below the $6 billion increase that had been expected.  Especially given that debt rose by $14 billion in March.

Insiders are suggesting that consumers might be wary about taking on more debt amid a recession in housing and after growth last quarter slowed to the weakest pace in more than four years.

Revolving debt, such as credit cards, fell $403 million in April after rising $6.7 billion in March, the Fed’s report showed. That’s the first decline since a $578 million drop in March 2006.