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The Federal Reserve reported yesterday that borrowing by consumers rose in
May for the seventh consecutive month as credit card and other types of
revolving debt jumped by the most since October 2004, Bloomberg News
reported yesterday. Consumer credit, or non-mortgage loans to individuals,
rose $4.4 billion, or 2.5 percent at an annual rate, to $2.174 trillion. The
figures suggest that Americans are using their credit cards to finance more
purchases as rising interest rates and slowing increases in real estate
values discourage borrowing against home equity. "Extracting the untapped
value of one's home is more expensive and may be downright risky if the
housing market continues to cool," said Chris Rupkey, an economist at Bank
of Tokyo-Mitsubishi in New York. Revolving debt, which includes credit
cards, rose $6.7 billion for the month, a 9.9 percent gain at an annual
rate. Nonrevolving debt, which includes car loans and mobile home loans,
fell $2.2 billion for the month.