The Associated Press says that consumer borrowing has increased as home owners have seen the days of easy credit dry up.
“The Federal Reserve reported that consumer credit rose at an annual rate of 5.9 percent in August, the biggest increase since a 7.9 percent jump in May.
The increase was led by an 8.1 percent leap in revolving credit, the category that includes credit card loans. Consumers have been using their credit cards more to finance purchases now that home equity lines of credit are becoming harder to obtain.
Non-revolving credit, which includes auto loans, also rose at a faster pace in August, increasing at an annual rate of 4.7 percent, compared with gains of 3.1 percent in July and 4 percent in June.
In total, consumer credit rose by $12.2 billion to a record $2.469 trillion. The increase was bigger than the $9.5 billion gain analysts had been expecting.”
How does this affect your business? Are more and more of your customers paying on credit? Many consumers are using their credit cards for “easy” cash and even to live and get by. Keep a close eye on your credit approved customers, notice any changes in buying or payment habits as well as payment habits. Otherwise you and your business could be suffering in a few months!
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