Consumer debt climbed for the fourth straight month in December, possibly a sign of increasing demand, a willingness to spend and that consumers are feeling more confident about the economy.

But, noting seasonal trends, a good portion of consumer debt accumulated in December could be short-term, cautions Ezra Becker, TransUnion vice president of research and consulting at Chicago-based credit bureau TransUnion LLC.

“Retail sales were strong during the fourth quarter, and a lot of people may have put purchases on their credit cards with the anticipation of paying it off relatively soon with tax refunds or bonuses,” Becker says.


Still, there is growing evidence that more consumers are borrowing, and if consumers continue spending, revolving consumer debt may gradually be reversing its long slide, he suggests.

“Lenders are giving out more credit and originating more new credit card accounts, which is part of what we are starting to see in the revolving debt figures,” Becker says. “For awhile revolving debt was actually contracting, and that is no longer the case.”

The Federal Reserve G.19 report released Tuesday showed that the total of all consumer credit outstanding grew a little softer $19.3 billion, or 9.3% at annual rate, in December after surging to a decade-high of $20.4 billion in November. The increase was the biggest gain in a decade, and much larger than expected by Wall Street economists.

Non-revolving credit, including student loans, car loans and loans for mobile homes, advanced 11.8% at annual rate to $1697.3 billion in the month from $1680.8 billion in November. Improving labor market condition coupled with increasing pay rate boosted demand on autos.

Auto sector posted another strong month for car sales, with 14.1 million annual rate cars sold last month. Also, demand on student loans increased as more Americans go back to school.

Revolving credit, which mostly measures credit card use, edged up 4.1% at annual rate to $801 billion in December from $798.2 billion in the prior month. Spending on credit cards grew for the second straight month as consumers continued to use credit cards more to purchase goods and gifts for holiday seasons.

Besides, since some of big banks imposed new fees on debit card use, more debit-card owners switched to credit card to avoid those fees.

For the year, total consumer credit rose 3.7%, the largest increase since 2007.

“We view this report as being consistent with broader trends of increased bank willingness to lend to consumers and increased consumer demand for credit” seen in the Fed’s recent survey on loan officers, said Cooper Howes, economist at Barclays Capital in a note to clients.

Most of the gain in non-revolving credit in December came from student loans, Howes said.

Credit card debt declined from a peak of $972.2 billion in September 2008 to $790.2 billion last April. Since then, the trend has flattened out and picked up to $801.0 billion in December.

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