Consumer credit card debt is on the rise, with the Federal Reserve reporting a swell of $300 million in revolving debt in October. According to CreditCards.com, that puts the total at around $792.3 billion.
The 0.6 percent increase has surprised many experts who expected that debt for October would remain stagnant as consumers exercised caution before the holiday season. Instead, credit card debt actually rose for the second month in a row—just the second time since the recession began in 2008.
According to Gregory Daco, a senior economist with IHS Global Insight, the uptick could signal growing confidence in American consumers.
“It would mean that consumers are feeling more confident about using their credit card and pulling their credit card out of their wallet,” Daco told CreditCards.com. He later added that consumers may also be starting to buy items they had previously put off due to recession fears.
“American households have been in either recession mode or recovery mode for about four years now,” he continued. “There is pent-up demand for goods that is very gradually coming out. Consumers who weren’t able to purchase a fridge or a dishwashing machine or a car…may decide that now is the time to make those purchases because their situation has improved slightly.”
Nonrevolving debt—which includes such debt as student loans and auto loans—also increased. According to the Federal Reserve’s G.19 consumer credit report, nonrevolving debt escalated to $1.67 trillion on an increase of 5.3 percent.
Coming into the holiday season, early forecasts suggest similar spending moods. Black Friday and Cyber Monday increased sales in industries like retail and electronics, Reuters reported.
