Americans cut back on credit card use in June, further evidence that high unemployment and slow growth has made consumers more cautious about spending.
Overall consumer borrowing rose because of increases in auto and student loans. The Federal Reserve says total borrowing increased 3% to $2.58 trillion in June from May. That’s just below the all-time high reached in July 2008.
Credit card debt fell 5% to $864.6 billion. That’s only 1.6% above the post-recession low reached in April 2011. Americans have been relying less on credit cards since the 2008 financial crisis and Great Recession.
A category of borrowing that includes auto and student loans increased 7% to $1.71 trillion.
Steady gains in student loans have pushed borrowing back to near-record levels. Total student loan debt has jumped 54% since mid-2008 to $902 billion as of March this year, according to the Federal Reserve Bank of New York.
The increase partly reflects high unemployment, which has led many Americans to seek better education and skills in a more competitive labor market.
A Commerce Department report last week showed that consumers are still frugal. They spent no more in June than they did in May, while their incomes rose at the fastest pace in three months.