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.