American consumers are piling on debt like there is no tomorrow. The latest figures, released this week from the Federal Reserve, show consumers added nearly $6 billion to revolving credit during February. This is 3.5 times the amount of debt added during February 1999. Over the past twelve months consumers have added a total of $43.2 billion to revolving credit. Totally American consumers owe a staggering $610.7 billion in revolving debt. Approximately $490 billion of this figure is bank credit card debt. Of the remaining $120 billion in revolving debt, around $95 billion comes from other credit cards such as store cards and gas cards. The rest comes from revolving lines of credit attached to checking accounts. The surge in consumer credit appears at the same time the stock market, especially NASDAQ, decides to meltdown. Rising interest rates, a bear stock market and soaring consumer debt does not a rosy picture make. This year could be a rough ride, with a very quick recessionary plunge. The financial storm clouds have gathered. Hopefully it will blow over.
U.S. REVOLVING CREDIT HISTORICAL ($ billions) Feb00 Jan00 Dec99 Nov99 Oct99 Sep99 Aug99 %GRWTH: 11.4% 15.1% 12.5 10.2 -0.5 0.0 2.5 $OWED: $610.7 605.0 595.8 589.8 584.3 584.5 584.5 Jul99 Jun99 May99 Apr99 Mar99 Feb99 %GRWTH: 12.1 13.8 4.5 5.6 -0.9 3.4 $OWED 584.6 578.5 572.2 569.9 567.3 567.5
Source: Federal Reserve; revised figures as of 4/07/00; For complete historical data visit www.carddata.com.