Consumer credit data from the U.S. Federal Reserve suggests that consumer spending remains sluggish and lending continues to be tight.
Revolving credit, 98% of which is credit card debt, decreased 1.1% in September, to $889 billion from $898.9 billion the previous month, according to the Fed's G.19 report on consumer credit released Friday.
Total seasonally adjusted consumer credit outstanding, which includes revolving and nonrevolving credit, decreased at an annual rate of 7.25% in September, to $2.46 trillion, the report states.
Credit card performance in October was varied as consumers continued to bear high unemployment rates and a lack of available credit, according to Fitch's Prime Credit Card Index results (CCR Newsline, Oct. 30). Charge-offs declined for the second time in three months, but delinquencies resumed their upward trend.
Charge-offs on prime credit card portfolios fell to 10.75% of outstanding receivables, 77 basis points lower than the previous month's 11.52%.
"U.S. consumer credit quality measures remain pressured and charge-offs will stay high until we see some improvement in employment conditions and in delinquency trends," Michael Dean, Fitch Ratings managing director, said in the report.
Delinquencies in excess of 60 days reversed their downward trend in October, increasing to 4.22%, 16 basis points higher than September's rate of 4.06%.