TOTAL CONSUMER CREDIT NEARS RECORD $2 TRILLION BUCKS

November 11, 2003

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U.S. consumer debt expanded a third straight month in September as Americans increased borrowing on their credit cards and took out more in car and student loans, Federal Reserve statistics showed, Bloomberg News reported.

Borrowing through credit cards, auto loans and other non-mortgage personal debt jumped 9.7 percent, or $15.1 billion, to $1.972 trillion, the Fed said. In August, consumer credit rose by a revised $8.8 billion, or 5.5 percent.

“Consumer spending in the third quarter was quite strong, and with income growth being far from robust, consumers continued to add debt in September,” said Jose Rasco, a senior economist at Merrill Lynch & Co. in New York. MBNA Corp. said last month that customers charged 13 percent more in the third quarter than a year ago. Bank One Corp. reported a 7 percent rise in revolving credit use in the period. Consumers are tapping credit cards more as a rise in mortgage rates has made refinancing less attractive, reducing one source of cash. Economists had projected a $5.1 billion September rise in consumer credit, based on the median of 43 estimates in a Bloomberg News survey.