People used credit cards at a higher rate than seen in years during the month of May, according to one recent report.
Information released by the Federal Reserve revealed that during the month borrowing on the cards increased $17.1 billion from April. The total spending was the highest since November 2007 and was largely due to high levels of both student and auto loans.
Economists said that the numbers were quite high and that while many more were expected to borrow money from the financial institutions in the months ahead, it would likely not match the significant increase during May.
“We might see additional increases in credit card debt in the coming months,” said Paul Edelstein, director of consumer financial economics at IHS Global Insight. “But they won’t match the May surge.”
The credit card sector, which relies on merchant services, has been in the headlines for delinquency rates. According to Barclay’s Capital, the number of delinquency payments fell to 2.35 percent. Part of the reason, according to some experts, is due to the fact that financial institutions have tightened credit restrictions in recent years.Back To Blog