Americans Still Hesitant To Increase Borrowing

Washington, DC, April 8, 2010--U.S. consumer credit fell more than anticipated in February, as Americans appear to be reluctant to increase debt without further improvement in the labor market.

Borrowing fell $11.5 billion, the most in three months, after a revised $10.6 billion January gain that was twice as much as initially estimated, the Federal Reserve said.

The drop was the 12th in 13 months and shows consumer purchases, which account for about 70 percent of the economy, will be limited until households become more optimistic about the economy.

Revolving debt, such as credit cards, declined by $9.4 billion in February, the most in three months, according to the Fed’s statistics. Non-revolving debt, including loans for cars and mobile homes, dropped by $2.1 billion. The Fed’s report doesn’t cover borrowing secured by real estate.