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Americans may now be feeling better about the economy in general and their own finances in particular, leading to more borrowing overall, but at the same time, many are still being more cautious with their credit card balances.

Though consumer borrowing increased overall once again in the month of February, it did so despite the second straight month of declines in credit card debt nationwide, according to the latest monthly consumer credit statistics issued by the Federal Reserve Board. While the amount of borrowing increased overall to more than $2.52 trillion, up 4.2% from January’s slightly more than $2.51 trillion, that increase came entirely as a result of borrowing on nonrevolving loans.

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This type of credit, which the Fed uses to refer to installment loans – like student loans and auto financing – that do not include mortgages, rose 7.7% to a total of more than $1.72 trillion, the report said. Consumer borrowing on this type of loan has been rising for years since the end of the recent recession.


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However, credit card balances have fallen considerably during that time, and though borrowers recently bucked that trend during the holiday shopping season, debt levels are beginning to regress once again, the report said. February saw consumers’ credit card balances drop to a total of $798.6 billion, the first time the figure has fallen below $800 billion since November. That number was down 3.3% from $800.8 billion in January, which itself was a notable 4.4% decline from December’s $803.8 billion.

And during the month of February, interest rates on consumers’ credit cards were a bit of a mixed bag, the report said. Though APRs on all accounts slipped somewhat to 12.34% from the 12.36% seen at the end of last year, those on accounts assessed interest rose appreciably to 13.04% from 12.78%.

Financial experts had actually cautioned that the increases in consumers’ credit card use seen toward the end of 2011 were likely the result not of shifting attitudes toward borrowing on these accounts, but simply to finance gift purchases for the holiday shopping season. And with balances falling in each month since the new year began, it seems this prediction has proven correct. However, at the same time, many also say that credit card borrowing has to reach its logical bottom at some point in the near future.

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