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Consumer Credit Card Use Evened Out in November

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Following a massive jump in consumer credit card use in October, there wasn’t much room for growth in November. Still, outstanding revolving credit increased slightly, from $856.4 billion to $856.9 billion, according to the latest report from the Federal Reserve. That leaves the annual growth rate of revolving consumer credit at 0.6% as of November.

“I think one of the things that is really important to keep in mind is October was huge,” says Samuel Rines, an economist and equity analyst for Chilton Capital Management in Houston.

Rines is referring to the spike in credit card use in October, resulting in a revolving credit annual growth rate of 5.6%, after it was -1.2% in September.

“5.6 is off the charts, really,” he says.

The numbers are seasonally adjusted, but the run-up to and effects of the government shutdown contributed to the fluctuations. Those outliers, combine with 2013′s shorter holiday shopping season, due to a late Thanksgiving, it wouldn’t have been surprising to see the revolving-credit growth rate slow more than it did. The 0.6% growth rate in November is more in line with quarters one, two and three this year, which were 1.5%, 1.2% an 0.4%, respectively.

“It was really hard to push the number higher,” Rines said. “That was just a huge jump from September to October, and it was going to be very difficult, regardless of if you had a short holiday season or a long holiday season.”

It will be interesting to see how the October spike carries through December, though Rines estimated the effect of earlier abnormalities won’t last longer than that.

Nonrevolving accounts, such as auto and personal loans, continued to flourish, likely aided by low auto loan interest rates of 4.42% (they were 4.69% in the first quarter, 4.13% in the second quarter and 4.46% in the third quarter). The nonrevolving credit annual growth rate declined slightly from October, to 6.4% from 7.6%, maintaining its strong post-recession recovery.

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