Consumer Credit Contracts for the First Time in Nearly a Year
October 7, 2011    Disclosures    POSTED IN  Personal FinanceEconomy

Total consumer credit, which had managed to expand for ten months, contracted by $9.5 billion during the month of August according to the latest consumer credit report by the Federal Reserve. The August drop in credit, -4.6% at an annual rate, was the 12th largest percentage contraction since 1978.

Consumer credit covers most short and intermediate-term credit extended to individuals, excluding loans secured by real estate. This credit can be divided into two categories, revolving and non-revolving lines.

During August revolving credit, namely credit cards, decreased by $2.2 billion, an annual rate of -3.4%. Non-revolving credit, auto, education, boats, trailers and mobile home loans, fell by $7.3 billion, an annual rate of  -5.2%. The last drop in non-revolving debt was May 2010.

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