Consumer Credit

Consumers boosted their borrowing in May, mostly reflecting heavy credit card use. The Federal Reserve reported that consumer credit increased at an annual rate of 3.6% in May, roughly the same pace as logged in the prior month. The pickup pushed total consumer debt up by $7.8 billion to $2.57 trillion. That was a bit more brisk than the $7 billion over-the-month increase economists had been expecting.

  Ayman and Rahma abu Hussein can't help but feel they are moving up in the world. The database engineer and his wife just bought their first home, and it's large enough for both of their children to have their own rooms. There's a Hyundai parked outside and a flat-panel TV hangs in the living room, one of many new appliances decking out the place. But the Abu Husseins are up to their ears in debt. Their upward mobility, like that of thousands of other Palestinians, came tied to something that was once rare in the West Bank: mortgages and consumer credit.

When I heard last week that banks want to forgive up to 40% of some customers' credit card debt, my first question was, "What's the catch?" "There's no catch," answered Scott Talbott, chief lobbyist for the Financial Services Roundtable, an industry group that helped concoct the debt-relief program. "There's no hidden agenda. These are extraordinary times and the industry is aggressively working to help customers." He's half right.

Americans are buying cars at a faster rate than they have in four years as rising gas prices and easier-to-get financing are driving more buyers to dealership showrooms. Bolstered by a surge in sales of fuel-efficient vehicles, automakers sold cars at an annualized sales rate of 15.1 million in February, which coincidently marked the industry's best performance since the February of the last leap year in 2008. They are selling to buyers such as recent college graduate Lindsey Roberts, an Atlanta resident who went shopping earlier this month to replace her 12-year-old Chrysler that got less than 20 miles per gallon.

Got a beef with your mortgage lender? Is your bank unresponsive when you complain that your escrow account is fouled up and making your monthly payments needlessly high? Did your loan officer switch you into a more costly home loan than you were promised? Or worse yet, did your home loan servicer ignore you when you told him you've had an unexpected drop in income and needed a modification to avoid missing payments? If any of these situations sound familiar, here's a heads-up about the newest and least-publicized source of federal help: the Consumer Financial Protection Bureau's home mortgage complaint and dispute resolution hotline.

Daniel Mayeda is at it again. For the second time this year, the Culver City homeowner is poised to refinance his house to take advantage of lower interest rates. "It makes sense for me every time I do it because I save more than 100 bucks a month on my house payment," said the 40-year-old entertainment lawyer, who has refinanced his home three times in the last two years.

Consumer credit in the U.S. declined in February more than anticipated, indicating Americans are reluctant to take on more debt without further improvement in the labor market. Borrowing fell $11.5 billion, the most in three months, after a revised $10.6 billion January gain that was twice as much as initially estimated, the Federal Reserve said today in Washington. The decline in the February measure of credit card debt and non-revolving loans was worse than the lowest estimate in a Bloomberg News survey of 34 economists.

For better and for worse, consumers are starting to take on more debt — much more, surprisingly. The Federal Reserve reported Tuesday that consumer credit outstanding surged in December at a 9.3% annual rate, thanks mostly to strong car sales and growing demand for student loans. The seasonally adjusted dollar gain from November was $19.3 billion. That was almost triple what analysts were predicting, and December marked the second straight month of 9%-plus growth. On the positive side, the increase reflects the pickup in consumer confidence and spending as the labor market has perked up since last summer.

Consumers have boosted their borrowing at the fastest pace in three months, turning increasingly to their credit cards to replace home equity loans as a source of ready cash. The Federal Reserve reported that consumer credit rose at an annual rate of 5.9% in August, the biggest increase since May, when it jumped 7.9%.

Consumer borrowing posted the smallest rise in six months in April as Americans paid off some of their credit card debt. The Federal Reserve reported that consumer borrowing rose at an annual rate of just 1.3% in April, down from a 7% rise in March. It was the slowest growth in borrowing since a 0.1% rate of increase in October. The slowdown was led by a 0.5% rate of decline in the category of debt that includes credit cards.

For better and for worse, consumers are starting to take on more debt — much more, surprisingly. The Federal Reserve reported Tuesday that consumer credit outstanding surged in December at a 9.3% annual rate, thanks mostly to strong car sales and growing demand for student loans. The seasonally adjusted dollar gain from November was $19.3 billion. That was almost triple what analysts were predicting, and December marked the second straight month of 9%-plus growth. On the positive side, the increase reflects the pickup in consumer confidence and spending as the labor market has perked up since last summer.

Consumer borrowing increased at an annual rate of 10% in November, the largest jump in a decade, as Americans were more comfortable using their credit cards early in the holiday season, the Federal Reserve reported. Overall consumer credit surged $20.4 billion in November from the previous month to $2.48 trillion, the Fed said Monday. The percentage increase was the largest since an 18.4% jump in November 2001. The figures include most short- and medium-term credit, such as increased auto and student financing, but not mortgages or home-equity loans.

Consumer borrowing increased at an annual rate of 10% in November, the largest jump in a decade, as Americans became more comfortable using their credit cards heading into the holiday season, as well as taking out auto and student loans, the Federal Reserve reported Monday. Overall consumer credit surged $20.4 billion in November from the previous month to $2.48 trillion. The percentage increase as the largest since an 18.4% jump in November 2001. The figures include most short- and medium-term credit, but not mortgages or home-equity loans.

Got a beef with your mortgage lender? Is your bank unresponsive when you complain that your escrow account is fouled up and making your monthly payments needlessly high? Did your loan officer switch you into a more costly home loan than you were promised? Or worse yet, did your home loan servicer ignore you when you told him you've had an unexpected drop in income and needed a modification to avoid missing payments? If any of these situations sound familiar, here's a heads-up about the newest and least-publicized source of federal help: the Consumer Financial Protection Bureau's home mortgage complaint and dispute resolution hotline.

U.S. consumer debt fell during July through September, pushed down by declines in mortgage balances, the New York Federal Reserve said on Monday. The report showed households continuing to shed debt and dig out from losses following the collapse of housing markets and the 2007-2009 recession. Total consumer credit was 0.6 percent below its second quarter level, the New York Fed said in its quarterly Household Debt and Credit report. "The decline in outstanding consumer credit reveals that households continue to try and deleverage in the wake of a challenging economic environment and large declines in home values," said Andrew Haughwout, an economist in the New York Fed's research and statistics group.

Consumers who are denied credit or whose existing loan terms become less favorable soon will be able to get free credit scores under new rules from the Federal Reserve Board and Federal Trade Commission. As part of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act, the two regulators issued final rules this week related to new credit-score disclosures. Effective July 21, if a credit score is used to set certain credit terms, or to deny or revoke credit or change existing terms, then banks and others will be required to disclose credit scores and related information to consumers.

April was financial literacy month. Did you learn anything? The anecdotal evidence doesn't look good. Americans are falling deeper into debt, and they are increasingly waiting too long to seek help, said David Jones, president of the Assn. of Independent Consumer Credit Counseling Agencies. He ought to know. His group, based in Fairfax, Va., represents nonprofit credit counseling companies that provide free and low-cost consumer credit counseling, debt management and financial education services nationwide, and he said it was inundated with calls for help.

Consumer credit in the U.S. declined in February more than anticipated, indicating Americans are reluctant to take on more debt without further improvement in the labor market. Borrowing fell $11.5 billion, the most in three months, after a revised $10.6 billion January gain that was twice as much as initially estimated, the Federal Reserve said today in Washington. The decline in the February measure of credit card debt and non-revolving loans was worse than the lowest estimate in a Bloomberg News survey of 34 economists.