I’m not sure how many of you heard last night that consumers are relying on credit cards more and more these days.

From the AP:

WASHINGTON (AP) - Consumers boosted their borrowing more than expected in June, reflecting another hefty jump in credit card debt.

The Federal Reserve reported Tuesday that consumer credit rose at an annual rate of 6.5 percent in June. It marked the second straight sizable gain. Consumer credit rose by an even larger 7.9 percent in May.

The increase was led by an 8.4 percent rate of increase for revolving credit, the category that includes credit card debt. The category that includes auto loans rose at a 5.3 percent rate, the same as in May.

Total consumer credit rose by $13.2 billion in June to a record $2.459 trillion. The increase was double what economists had been expecting.

Does this surprise anyone? I guess now that mortgage rates are rising and home equity is tapped out for many, using the house as a piggy bank is no longer an option.

Are you relying on credit more? I know I’m charging more, but still paying it off each month, except for that 0 percent on purchases card that has 14 months to go. Love those introductory rates!

That might be factoring into this number, said a spokeswoman at the Federal Reserve I asked her just how the heck this number is calculated and here’s what she had to say:

The number you see is a snapshot in time and does not include balances that might be paid in full at the end of the month and a lot of people like you and me who use them as an instrument of convenience.

This entry was posted on Wednesday, August 8th, 2007 at 4:02 pm and is filed under Main, credit. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.