Estimated read time: 2-3 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
WASHINGTON (AP) -- Consumers used their credit cards less in November, but they couldn't say no to automobile purchases.
The Federal Reserve reported Thursday that consumers increased their borrowing by $4 billion, or at an annual rate of 2.4 percent, in November, pushing up their total debt to $1.994 trillion.
Consumers' borrowing behavior was sluggish compared to October, which posted a $8.3 billion rise to $1.990 trillion, an annual rate increase of 5 percent.
"Consumers simply couldn't say no to those lofty rebates and enticing incentives for autos," said Richard Yamarone, economist with Argus Research Corp.
The bulk of November's borrowing was in nonrevolving credit, which includes new cars, vacations and education. That borrowing rose by $4.6 billion in November, or a 4.4 percent rate.
In October, nonrevolving credit was up a revised $5.7 billion, or a rate of 5.5 percent.
Revolving credit, which includes credit cards, dropped by $564 million in November, or a 0.9 percent rate. That compared to revised increase of $2.6 billion in October, or a rate of 4.3 percent rate.
"The decline in revolving credit suggests consumers chose to keep their credit cards in their wallets," Yamarone said. "Perhaps this was a breather before ringing up a storm in December."
Holiday shoppers procrastinated this year, frustrating retailers through the early part of December. But they came through at the last minute with a spending spree right before and after Christmas. Even struggling department stores ended up with solid results in sales figures issued Thursday.
November's sluggish borrowing isn't cause for worry, Yamarone said.
"Rising incomes from increased employment, tax cuts and heavily discounted holiday merchandise almost certainly boosted spending in the last quarter," he said.
The Fed's report includes credit card debt and loans for cars, boats and mobile homes. It does not include real estate loans such as home mortgages or home equity loans.
(Copyright 2004 by The Associated Press. All Rights Reserved.)
