Consumer Credit Card Debt Contraction Continued in June

Like a broken record, the Federal Reserve reported late Friday that consumer credit card debt outstanding had contracted in June…for the 21st straight month.

The Fed said in its monthly Consumer Credit statistical release – also called the G.19 report – that total revolving credit in the U.S. declined at a 6.5 percent annual rate in June. Revolving credit is principally comprised of credit card debt.

Total outstanding credit card debt was $826.5 billion at the end of June, down from a peak of $975.7 billion in September 2008, and the lowest reading since late 2005.

According to the Fed data, collected each month from credit granting institutions, credit card debt declined at a preliminary annual rate of 9.4 percent in the second quarter of 2010. The annualized rate of decline was 9 percent in the first quarter of 2010 and 9.6 percent for all of 2009.

Overall consumer credit declined at an annual rate of 0.7 percent in June, buoyed by a 2.4 percent increase in non-revolving debt. Non-revolving debt as measured by the Fed includes personal, auto, student, and other types of closed-end loans. Debt backed by real estate is not reported in the G.19 release.

Total consumer debt outstanding at the end of June was $2.418 trillion, down from a peak of $2.582 trillion in July 2008.