US consumers back to their usual credit habit
The United States Federal Reserve, the country’s central bank, reported a 3.5 percent increase in the amount of revolving debt of American shoppers in December 2010, suggesting that more than more consumers are now more comfortable in using their credit card amid economic recovery.
A new data released by the United States Federal Reserve showed a 3.5 percent increase in revolving debt expenditures of Americans shoppers in December last year, suggesting that consumers are now going back to their usual credit spending habits.
The Federal Reserve, which is the US central bank, reported that American credit card spending rose by 3.5 percent in December 2010, the first time in more than 26 months.
Many American consumers held back spending due to high unemployment rate and falling home prices brought by the global financial crisis.
Meanwhile, the central bank also reported that the amount of all outstanding consumer credit bounced back by 2.6 percent in the fourth quarter of 2010 after three straight quarters of decline.
But despite the increase credit card use in December, consumer debt continued to fall to its second consecutive year – the Federal Reserve said that consumer debt in 2010 fell by 1.6 percent after a 4.4 percent drop in 2009.
Since the start of the debt data tracking in 1943, federal regulators were able to record two years when US households hold back the debt spending – in 1991 and 2009.
In December 2010, consumer debt increased by at least $6.1 billion from $2 billion in November, and $7.7 billion in October.
Many analysts said that the increase in overall debt in December only showed that consumers are now more comfortable in using “plastic” in the wake of the global recession that has hit the US.