Consumer Credit Rises for 21 Straight Months

Consumer Credit Rises for 21 Straight Months

The Federal Reserve reported today that Americans borrowed more money in June, continuing an upward trend that, while briefly interrupted by the financial crisis, first resumed again in earnest in August 2010. Almost every month since then, consumers have expanded their credit, showing lenders' growing willingness to extend credit and a slowly recovering economy in which people are warming back up to debt. Consumer credit outstanding has now risen for 21 straight months.

Today's numbers notably don't include loans secured by real estate, like mortgages. Instead the Fed's monthly report is a snapshot of the total revolving and nonrevolving debt outstanding in the U.S. at a given time. Revolving credit includes lines of credit like credit cards, while nonrevolving credit includes car loans, mobile home loans, education loans, among other things.

Revolving credit outstanding dropped $2.7 billion from May, and has fallen more than $150 billion since 2008. Meanwhile, nonrevolving lines of credit have increased by more than $470 billion in the same time span. For all of Q2, a 5.9% jump in outstanding credit was driven by 7.5% growth in nonrevolving credit, while revolving credit grew at just a 2% clip.

Edtior's note: A previous version of this article incorrectly characterized Q2 increases as June increases. The Fool regrets the error.


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