Credit Card Debt Surges in May

U.S. consumers took on credit card debt in May at the fastest rate in years, according to the Federal Reserve.

In the Fed’s monthly consumer credit statistical release late Friday, member banks reported a 5.1 percent annual increase in revolving debt, principally comprised of credit card loans. Banks reported adding $3.3 billion to current outstanding credit card balances in the month to stand at a total of $793.1 billion.

May marked only the second time in nearly three years that credit card debt has expanded. Credit card debt peaked at $973.6 billion in August 2008. Since then, total credit card debt outstanding has been steadily contracting due to banks charging off debt at a record pace and tightening standards for new card issuance.

Non-revolving debt – comprised of closed end credit like student and auto loans – rose at an annualized rate of 1.3 percent in May. The non-revolving debt reported by the Fed in its monthly report, also called G.19, does not include mortgages and home equity lines of credit.

Total consumer credit outstanding was $2.432 trillion in May. The month marked the eighth-straight that over consumer credit outstanding has increased. In prior months, the gains were driven primarily by auto and student loans.