This blog entry seems to be déjà vu. Consumerrevolving credit declined an estimated $2.7 billion in Februaryfrom January (which was down a revised $4 billion from December).According to the Federal Reserve’s G19 monthly reading, December2010 was the one positive month in over two years. As I havecommented before, this statistic includes all month-endreceivables-including those that will ultimately be paid off in thenext account cycle.
While revolving credit (primarily credit cards) declined at anannualized 4.1% in February, non-revolving credit (primarily carand student loans) increased an annualized 7.7%. Consumers areclearly hesitant to growth their interest-accruing balances (andtruth be told, issuers are still charging off accounts at anelevated, but declining rate).
Other data sources like First Data’s SpendTrend noted credit cardpurchase volumes growing in February (+9.9% year over year).Consumers appear unwilling to make those balances stick (or maybewhen more of your charges are covering gasoline expenses, you arejust less willing to make big ticket, likely revolvingpurchases).
Watch for the credit card accounts-on-file statistics from thecard networks as we get in to the Q1 earnings reporting season.Will those be déjà vu as well? Maybe February was just theGroundhog Day effect.
I suspect December’s good news for the credit card industry wasthe anomaly .