The release of the FederalReserve’s G19 statistics on consumer credit outstanding in midNovember held more bad news for credit cards.While installmentcredit (cars, etc.) increased modestly, revolving credit dropped atan annualized rate of -8.8 percent in Q3 (September alone droppedat a -12.1 percent annualized rate).Previously this year, itappeared that the rate of decline in revolving credit might beslowing.
By this measure, consumer revolvingcredit, primarily credit cards, is down 15 percent (an astounding$144.2 billion) since the end of 2008.Part of this story is clearlycharged-off assets which decrease the total outstandings, andissuer charge-offs remain very high and continue to erodeoutstandings.But, as I discussed recently, the ongoing decline incredit card accounts makes it increasingly unlikely that issuerswill be able to rebuild card assets any time soon.
The good news?The Fed’s Q3 numbersare preliminary and subject to revision.