Consumer Revolving Debt Explodes in May. What Does That Mean?

Latest figures out show that consumer revolving credit grew in May at an annual rate of 11.25 percent. That’s a huge jump. One we have not seen in a while. But what does it really mean?

Consumer credit overall grew at a rate of 8 percent.

It’s far too early to tell if this is an early sign of consumer confidence emerging or continued demand for credit to make basic necessities a reality.

The pools of securitized assets numbers remain very low and without the ability to generate and offload new consumer credit, as was historically the case, we should not expect to see easy lending return soon.

The largest concern at the post seems to be if consumers are relying upon lines of credit to make ends meet. Historical evidence may provide a clue as consumer spending does typically jump in the summer as people invest in vacations.

The next historical spending spike should occur right before back to school time. We’ll have to watch that spike carefully for clues.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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