Consumer debt jumps $8.9 billion

Personal debt rises as Americans take out more fixed-payment loans.

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By Kenneth Musante, staff writer

NEW YORK ( -- Americans' personal debt jumped to a more-than-expected $2.6 trillion in April, according to a report from the Federal Reserve released Friday.

The total debt held by individuals rose $8.9 billion from the prior month. Analysts polled by had expected personal debt to increase by only $7 billion.

The category of debt that includes credit cards, referred to as "revolving credit," rose by a mere $300 million, while the category that includes fixed-payment loans, such as student and car loans, jumped $8.7 billion.

The government report excludes mortgages and home equity loans.

The non-revolving credit increase may be a little inflated, according to Sean Maher, economist with Moody's Vehicle sales for the prior month (March), which reflect April auto loans, the leading component of non-revolving credit, did not rise enough to have much of an impact on debt.

"I would not be surprised if these numbers were revised downward next month," said Maher, and added that he expects non-revolving credit to continue to slow.

Auto sale, which declined in April, continued their downward spiral in May as the price of gasoline neared $4 a gallon.

Michelle Meyer, economist with Lehman brothers also called the increase in non-revolving credit "puzzling."

Less puzzling was the decline in revolving credit. Banks have been tightening their lending standards, according to a Federal Reserve survey of loan officers, so that slowdown was expected, said Meyer. To top of page

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