Another sign that “Wall Street” and “Main Street” are not intersecting is that consumer credit is declining rapidly. Consumer revolving credit, mostly credit card debt, took another enormous dive as Americans cut more than $9 billion off in August, bringing the year-to-date total reduction to $57.9 billion. Posting its 12th consecutive monthly decline, U.S. consumer revolving credit dipped below $900 billion in August. Since peaking at a revised $975.2 billion in the third quarter of last year, Americans have chopped-off more than $75 billion in revolving credit to-date. According to new and revised data released by the Federal Reserve, revolving credit declined at an annual rate of 13.1% in August, following a revised 3.1% decline in July and a 6.4% drop in June. In July revolving credit declined to a revised $909.3 billion and to a revised $911.7 billion in June. March posted the largest contraction over the past nine months, dropping more than $14 billion. Bank credit card debt (excluding store and gas credit cards) at the end of the second quarter was about $775 billion or roughly 85% of total revolving credit, according to CardData (www.carddata.com). Store and gas credit cards had about $105 billion in outstandings at year-end 2008. At the end of July, Americans were $2472 billion in debt, excluding home mortgages.
REVOLVING CREDIT HISTORICAL ($billions) Aug 09 Jul 09 Jun 09 May 09 Apr 09 Mar 09 GRWTH: -13.1% -3.1 -6.4 -12.1 -11.7 -9.6 $OWED: $899.4 909.3 911.7 916.6 927.9 934.3 Source: Federal Reserve; revised figures as of 10/7/09; For complete historical data, visit CardData (www.carddata.com)