Americans are still borrowing a lot of money but now it's apparently on credit cards instead of auto and other installment loans.
That's the synopsis of a Federal Reserve Board report out this week. Analysts say consumers may be cutting back on other spending in order to pay for the ever-increasing cost of gasoline. Much of that is being paid for on credit cards.
The Federal Reserve said Americans increased borrowing in May at a 2.4 percent annual rate. April's rise was a whopping 5.2 percent. Borrowing on credit cards and other revolving debt charges increased at an annual rate of 9.9 percent.
The total amount of borrowing in May rose $4.4 billion to a total of $2.17 trillion. April's increase was $9.34 billion.
Consumer debt has now increased for seven consecutive months, according to the Associated Press. Much of American household incomes are tied up in monthly debt payments. The average household credit card debt is near $10,000 according to a report on CNN.com.
The average number of cards per household is also on the rise. CNN reports the average number of bank cards per cardholding household is 19.3.
We've also noticed far more places where credit cards are accepted for payment. It's convenient and can become habitual. Consumers must always ask themselves if they would normally finance over time a meal at a restaurant, a bag of groceries or a tank of gasoline.
