- Posted April 13, 2014 by
Auto and Student Loans Surge as Credit Card Use Drops
Borrowing for auto purchases and student loans influenced the increase, while credit card spending continues to decline.
Consumer borrowing increased significantly more than economists’ predictions for February, according to new data from the Federal Reserve.
Nonrevolving credit—the category that includes auto and student loans—increased by $18.9 billion in February 2014.
It is the biggest gain in nonrevolving credit in a year, according to Bloomberg Businessweek.
“With car sales improving, and most of that done on credit, we’re on the upswing,” PNC Financial Services Group Inc. Chief Economist Stuart Hoffman told Bloomberg Businessweek. “More people are working, their credit scores are better, their income prospects are improved, and their willing to apply for loans.”
Revolving credit continued its decline, influenced mostly by credit card spending, with a $2.4 billion drop in February. In January, the revolving credit decreased by $241 million.
Total consumer borrowing increased by $16.5 billion to $3.1 trillion in February.