WASHINGTON (4/8/14)--Driven by big-ticket purchases, consumer credit climbed by $16.5 billion in February, exceeding expectations of a $14 billion increase for the month (Economy.com April 7).
Households have kept credit cards tucked away of late, however, as revolving credit balances fell $2.4 billion for the month, according to Federal Reserve data released Monday.
The upswing in consumer credit balances, especially in nonrevolving credit such as student and auto loans, is likely fueled by improvements in the job market, housing prices and stocks. The low-interest rate environment, among other factors, has enticed consumers to make larger purchases, such as on vehicles or education, analysts said.
Those nonrevolving loans jumped $18.9 billion for February, the largest step up since February 2013. Loan levels have not decreased since August 2011.
Analysts expect this trend to continue, thanks to additional growth in auto and student loans.
With revolving credit slowing for the second straight month, it appears consumers are still hesitant to shoulder higher levels of credit card debt.
That type of credit should rebound as the job market continues to realize gains and the harsh winter weather continues to recede, according to Economy.com.
Credit unions' overall amount of credit remained steady. The 8.8% decrease in revolving credit was offset by the 8.8% increase in nonrevolving credit.