WASHINGTON — American shoppers have regained their legendary appetite for credit, with credit card spending rising in December for the first time in 26 months, the Federal Reserve reported Monday.
Long held back by recession, high unemployment and falling home prices, US consumers boosting revolving debt -- mostly credit card debt -- by 3.5 percent in December, the central bank reported.
The amount of all outstanding consumer credit rebounded 2.6 percent in the final quarter of 2010 from a year earlier, after three quarters of shrinking declines.
Despite the solid increase, for all of 2010 consumer debt fell for the second year running, by 1.6 percent compared with a 4.4 percent drop in 2009, the Fed report said.
Since the Fed began tracking the data in 1943, there was only one other year when US households cut their debt: in 1991, by 1.2 percent.
In last December alone, consumer debt increased by $6.1 billion after rising $2.0 billion in November and $7.7 billion in October.
The 3.0 percent increase for overall debt in December was stronger than most analysts expected and suggested consumers may be more comfortable resorting to using their plastic, amid a recovering economy.
"Surprisingly, revolving consumer credit, which is mostly credit card debt, increased by $2.3 billion," Nomura Global Economics said in a client note.
"The modest gain may indicate that many households have brought their credit card balances down to a more comfortable level relatively to incomes. If so, the extra savings used to pay down debt may diminish in coming months, leading to faster consumer spending," they said.
Nonrevolving credit -- loans to finance such items as vehicle purchases or university education which represent two thirds of consumer credit -- rose 2.8 percent in December.
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