Payment Card News

Debt Rebound?

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American use of consumer credit continues to gather steam as data for August shows a remarkable increase in the rate of growth compared to one year ago. During August of this year, consumers added nearly $4 billion to revolving credit compared to a pay-down of more than $4.5 billion during August 2001. According to figures released this week by the Federal Reserve, revolving credit is growing at an annual rate 6.5% compared to -2.2% one year ago. Since the first of this year consumer revolving credit has grown by $33.5 billion. Bank credit card debt at mid-year was $611.4 billion according to CardData (www.carddata.com). Bank credit card outstandings at mid-year were growing at an annual rate of 7.8% while overall revolving credit was growing at an annual rate of 2.9% in August. According to the government figures released yesterday, American consumers were $1.730 trillion in debt, exclusive of home mortgages during August. The FRB also reported that average interest rates for all credit card accounts now stands at 13.37% and 13.26% for accounts assessed interest. Rates for 48-month new car loans stands at 5.95% while rates for a 24-month personal loan average 11.28%.

                             REVOLVING CREDIT HISTORICAL
                                  ($billions)
        Aug 02   Jul 02   Jun 02  May 02   Apr 02    Mar 02   Feb 02
GRWTH:   6.5%     10.6     6.0     4.1      8.0       4.8      2.2
$OWED:  $725.9   722.0   715.6   712.1    708.7    705.4    705.0

        Jan 02  Dec 01  Nov 01  Oct 01  Sep 01     Aug 01   Jul 01
GRWTH:   1.8%    -9.7    12.7     -7.1     0.6       -2.2     -3.7
$OWED:  $702.4  692.4   698.0    686.4   692.7      693.5   698.1

Source: Federal Reserve; revised figures as of 10/07/02; For complete
historical data visit CardData (www.carddata.com).

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