Credit Card Debt Declines for Second Straight Month

Total credit card debt outstanding in the U.S. fell in July, marking the second straight month of declines. It is the first time in more than two years that revolving debt fell in consecutive months.

The Federal Reserve noted Monday in its monthly Consumer Credit statistical release that revolving credit, mostly comprised of credit card debt, fell at an annualized rate of 2.6 percent in July. Credit card debt outstanding dropped by 5.2 percent in June.

But the declines did follow a sudden spike in revolving debt in May. That month, the Fed reported an annualized increase in credit card debt of 8.4 percent, the fastest rate of monthly growth in a year.

At the end of July, the Fed reported total credit card debt outstanding of $849.8 billion, down from a peak of just over $1 trillion in July 2008.

Non-revolving credit in July, meanwhile, grew at a 7.4 percent annual rate. Non-revolving debt – primarily comprised of student and auto loans – has been growing quickly for the past 18 months. For the full year 2012, it expanded by 8.5 percent. So far in 2013, installment loans have grown by about 7 percent.