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Consumer Credit Card Debt Tumbles, Non-Revolving Credit Soars Most In 15 Months
Remember that epic spending spree that took place in March when consumers cleaned out their savings account and which resulted in a surge in March retail spending in consumer outlays? Now we know that in addition to borrowing from their savings, consumers also "charged" it, because as we reported last month, the April consumer credit soared by an unprecedented $8.8 billion, the most since 2007, and a clear outlier in recent years. April, incidentally is precisely when the credit card statements for March purchases would come due so while impressive, the surge in revolving credit wasn't quite surprising.
However, what is perhaps more notable now that the Fed just released the May consumer credit numbers, is that the month after the March spending spree, funding largely on credit, consumers hunkered down once more, and the May increase in revolving credit was a paltry $1.8 billion, much lower than the April surge, and the lowest since February. In other words, after the spending binge, came the credit card bills, and with them, the spending hangover.
And yet, while the combined May consumer credit number missed expectations of a $20 billion increase (down from $26 billion a month ago), the total number was still an impressive $19.6 billion.
Why? Because the relentless spending spree on government funded cars and student loans continues, and in the month of May some $17.8 billion in non-revolving debt was issued: as shown on the chart below, this was the single highest monthly non-revolving (cars and student loans) debt amount issued since February 2013, and the third highest ever!
Putting the spread between the revolving and non-revolving debt issued in the past year in context, here it is, in one chart:
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Good..I hope they never use credit....its better for them..
Don't forget the April 15 sticker shock likely set in this year. Many were burned...
Merely the dead body of society twitching. It happens.
pods
I'm guessing people went further into debt to pay their heating bills and do frivolous things like say... eat.
Might need a credit card for groceries. My bag of baked chips has gone from 12oz -->9oz --> 6.25oz in a span of about 6 months.
heaven forbid you eat less fat or pay to get even fatter.
Actually there is growing evidence that all this talk about fat and cholesterol is bogus, and the push against them is actually harming people's health.
Turns out that, despite what a lot of 17-year old girls might think, humans are primarily meat eaters. Carbohydrates, cheap calories, were few and far in between in our evolutionary history--We evolved while eating meat and fat.
Seems, like "climate change," the fix has been in from the beginning, at least since P & G first hydrogenated vegetable oil and called it food.
Just food for thought. Pun intended.
A good first resource on the subject: http://www.amazon.com/Good-Calories-Bad-Controversial-Science/dp/1400033462
I eat as much saturated fat as I can while avoiding all processed foods/grains and lost 50lbs, putting me back to my weight at 20 years of age.
www.marksdailyapple.com
Oh, and both fat AND cholesterol are brain food.
http://www.drperlmutter.com/about/grain-brain-by-david-perlmutter/
The shift from hunter/gathere was the biggest disaster to human health in history. If you read accounts from the pilgrims of what the indians looked like to them it's impressive. Sickly, pale, short europeans ran into 7 foot sculpted tan he-men... that they later killed with guns and alcohol and diseases, but I digress. Even tooth decay wasn't really an issue in early society, it was plant based diets that turned us all into the relative weaklings we are today. Vegans and vegetarians make no sense to me, it's like purposely devolving...
http://researchnews.osu.edu/archive/tallind.htm
Equestrian Indian tribes on the American Plains in the late 1800s were the tallest people in the world, suggesting that they were surprisingly well-nourished given disease and their lifestyle, a new study found.
Baked chips actually have as much fat as regular chips. Do some research.
The argument is moot. It wasn't the point of my post. God forbid some of us indulge once and a while. I run about 20 miles a week, I deserve it now and again.
Quit whining you little baby and eat your reduced portion of sawdust like a good beaver...
WAIT TILL "0" FOR YOUR STRIKE
Thats strange. Did credit card debt not soar the last time around ?
I am confused.
It doesn't mean most people are any more prudent than they were, it just means that credit cards are used less now. The action has shifted to other types of debt. When we talk about credit card debt, remember that probably the majority of Americans no longer have good enough credit to accumulate much more of it, they'll only hand out cards to people who are smart enough not to use them. Student loans they'll hand out to people literally on welfare, expect more stories about criminals trying to game that system for cash like they did with food stamps here in GA (they caught a ring of people setting up front food stores and then buying up people's EBT cards at a discount).
And credit limits came down for many.
"May increase in revolving credit was a paltry $1.8 billion, much lower than the April surge, and the lowest since February."
seriously? the world is ending because this is the smallest increase since Feb? a whopping 4 months ago? i know you love to cherry pick data, but this one is just hilarious.
Credit card interest is the lifeblood of the criminal bankstering syndicate, looks like its about time for another 'unforeseen troubles' and line up for more bailouts.
I think it might be a bit more apropo if you were to call it the Astroglide of the banking syndicate.
It helps them get in there, so to speak.
pods
Seriously, I got 3 credit card begging letters from banks just yesterday, ridiculous.
Me too SheepDog. Every week I get something from Capital One saying I am pre-approved for $30,000 for a car loan. I know it is real because I used the offer to buy my wife a car. But thats been two years so it is time for them to get me hooked on another loan.
I gave up credit cards about 25 years ago. I pay cash everywhere. House paid for, vehicles paid for, no other loans or debts. They finally quit sending me CC offers about 10 years ago. I don't even have a bank account.
But first they have to jack the rates up on the performing debt to offset the expected writedowns they won't be taking before the Fed gives them 120 cents on the dollar for the nonperforming tranches...
you know ... a lot of people are using student loans to make their ends meet ...
It's a much better racket for the government and banks than risky credit cards, hence the shift to student loans as the way to enslave the young. Back in my day if you were a spendthrift you could just default after a couple of years of stressful indebtedness, ah the good old times.
I'm involved in peer to peer lending. I started November 2013.
Out of 31 loans, two are dead beating and one just filed BK after paying on time for six months - I think this is a structured bankruptcy.
Needless to say, I'm liquidating my loans and getting out.
Just become a bank, then you can create the money you lend and charge for it.
pods
...and when the borrowers go bust, the FED will make you whole - wins all around!
And, on another note, I was just informed my health insurance does not conform to Obama Care standards and is being cancelled on 31 DEC 2014. I do not know what the replacement policy will cost yet. Oh, well. At least the insurance company executives get to spend my money and boost the economy. That makes me better off, right?
< More
< Way more
' I do not know what the replacement policy will cost yet.'
Let the ZH community help establish some certainty for you in an uncertain world.
I do, your new "health" tax will cost 70-90% more.
Auto loans and student loans... sometimes, life is just about being lucky.
There went the tax refunds, spent.
Max out your home at 125% Loan to value and also a Home equity along with multi-credit cards and buy physical PM's
Then default annd leave the banksters with non-performing loans the Federal Reserve will have to suck up.
LOL, they want credit and loans they'll get it with 100% all bad. Yellen, Rosengren, Williams, Evans and Dudley it's one way the little people can fight your corruption and lying.
I have thought about doing this often!! However, I just can't bring myself to do it.
Eventually you will. You will.
WASHINGTON (MarketWatch) -- "U.S. consumer credit growth remained strong in May but not at the fast pace seen in April, the Federal Reserve reported Tuesday. U.S. consumers increased their debt in May by a seasonally adjusted $19.6 billion, down from a revised $26.1 billion gain in the prior month. This was close to the market consensus. Monthly debt rose at a 7.4% annual rate in May, compared with a 10.0% rate in the prior month, which was the strongest rate since July 2011. Non-revolving category of debt, especially federal student loans, stayed strong, rising $17.8 billion or 9.3% in May, the third straight month of a 9% gain. Credit-card debt increased $1.8 billion or 2.5% after a surge of $8.8 billion, or 12.3% in the prior month. That gain in April was the highest annual rate of credit-card debt since November 2001."
go figure.
I see tons of new cars on the roads. The little Nissan Juke (?) and Ford Fiesta are kinda tiny. I was behind on this morning and the wheel base appears similar to a go-cart?
Don't hate, some of those little cars get 30+ MPG and start as low as 14k, actually a responsible choice consitering how easy it is to get loans for less efficient big cars.
I wonder if all the wealthy immigrants buying Real-Estate are heading to Home Depot for do-it-yourself projects?
* wow *
That kind of report should come with flashing red lights and sirens blaring...sorta like a submarine preparing to DIVE.
The car loan thing is spreading to the EU. I was in a big BMW dealership/ showroom last month and the price notices on all the cars exhibited were the monthly leasing rate only. You had to whip out a magnifying glass to find the cash price.
What's the interest rate over there on car loans?
For leasing, roughly: BMW 4% interest rate , 3 year lease. Volkswagen 2%, 4 year lease. BMW pushes leasing because ~ 80% of sales of the larger cars are to companies (who can deduct the leasing payments from tax) and only 20% to consumers.
For nonpremium makes like Fiat or Renault you can get a loan for 0% interest.
I've just joined them, added 10 more CC's to my growing list which will all soon be CCJ's once they are topped and not paid. In fact I'm changing my name by deed poll to Max. I just have to think of a suitable 2nd name, excluding Power. So this report is no surprise, I'm on the front line...
Max E. Padd
Max Doubt.
For about 4 years or so, I've bought just about anything and everything on my credit cards. Groceries, PM's, even bough a car and a piece of land with a CC. I then use one of the interest free offers from another card, pay off the first card and stretch the payments for 18 months. I do have to pay a fee for that transaction of about 2% (works out to about 1.3% annual rate). The transaction fee is more that made up for with the points and frequent flyer miles I get with the purchases (gone to Hawaii a couple of times with the miles). Most rigged games can still be played for profit, even this one.
And I'm guessing the Final Play is to walk away from all the non secured debt......it's just a matter of When (and make sure you get one last trip to Hawaii too !!)
Costa Rica. Beaches are almost as nice and food is a lot cheaper.
Speaking of non-secured debt…
Can a person shield assets from the BK courts by creating a Revocable Trust and depositing all assets into the Revocable Trust?
All depends upon which club you are a member of.
Impunity, bitchez!
Try it and then report back here.
Buy a top shelf $100K car and make it disappear to South America. Collect the insurance and some money from the transport.
Glad to hear that CC usage has tumbled.
It means fewer bankruptcies.