Credit card spending slows; consumers in a ‘frugal mood,’ expert says

[Pelican Press 0]

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Credit card spending slows; consumers in a ‘frugal mood,’ expert says

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In the last year, credit card debt spiked to a record $1.14 trillion. But recent signs show consumers may now be pulling back.

Revolving debt, which mostly includes credit card balances, fell 1.2% in August, compared to a year earlier, according to the Federal Reserve’s

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 released on Monday. Nonrevolving debt, such as auto loans and student loans, rose 3.3%.

After a prolonged ******* of high inflation and sky-high interest rates rates, spending habits are adjusting, according to Ted Rossman, Bankrate’s senior industry analyst. “Consumers have been in a pretty frugal mood lately,” he said.

This could be ‘just a blip’

However, it may be too soon to say whether August’s contraction reflects a real shift in consumer behavior, said Matt Schulz, LendingTree’s chief credit analyst. “It is far more likely that is just a blip.”

Even though spending has moderated this year, “it isn’t a huge decrease and I don’t think there’s really any reason to think that this is the beginning of a trend,” he added.

“it will be very interesting to see what the NY Fed debt data says when it is released next month,” Schulz said. “I expect it to show that debts are continuing to climb. I’d be very surprised if it didn’t.”

Heading into the peak holiday shopping season, lower rates and cooling inflation may encourage more spending in the months ahead, the National Retail Federation’s most recent

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“Easing inflation is providing added spending capacity to cost-weary shoppers, and the interest rate cuts expected to come from the Fed should help create a more positive environment for consumers in the future,” Jack Kleinhenz, the NRF’s chief economist said in a statement.

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#Credit #card #spending #slows #consumers #frugal #mood #expert

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