WASHINGTON – Consumer credit rose by $21.4 billion—a 7.8% annual rate—to nearly $2.54 trillion in March, according to the Federal Reserve's Consumer Credit Report released Monday. The increase was the most in more than a decade. Credit unions saw decreases in all forms of borrowing from the previous month, however, March's debt was greater than a year ago.
The $2.54 trillion borrowed in March compares with $2.52 trillion in debt during February and $2.42 trillion during first quarter a year ago.
The increase was led largely by a $16.2 billion surge in non-revolving debt comprising student loans and auto loans. Bloomberg noted that some applied for student loans to beat the interest rate increase on student loans that took out student loans before the interest rates rise on July 1, and that auto sales were strong.
Nonrevolving debt totaled $1.739 trillion—an 11.5% increase at an annual rate over February, when debt totaled $1,723 trillion. The March figure is also higher than the $1.629 trillion of first quarter a year ago.
Revolving debt, made up mostly of credit card debt, rose by $5.1 billion in March to $803.6 billion, up from $798.5 billion in February and $792.8 billion in first quarter 2011. March's increase is the first time this year that credit card balances have grown. The last four months of 2011 reflected steady increases in revolving debt.
Consumer debt borrowed from credit unions in March totaled $223 billion—down from $223.8 billion in February, but up from $218.1 billion in first quarter of 2011, according to the Fed's report.