Are Americans falling out of love with their credit cards again?
Consumer borrowing unexpectedly fell $3.3 billion in July, driven entirely by a drop in revolving credit, the category that includes purchases made with plastic, according to a Federal Reserve survey released Monday.
The decline was a big surprise – estimates in a Bloomberg survey of 37 economists had been for gains of $5 billion to $15 billion. It follows some conflicting reports on consumer confidence, underscoring the slow pace of the economic recovery.
The July decline, which broke a string of 10 consecutive monthly increases, was driven by a $4.8-billion drop in revolving credit. According to the American Bankers Assn., revolving credit remains 17% below its prerecession peak.