Investing.com -- Consumer credit in the U.S. surged more than 6% in May, according to a report from the Federal Reserve released on Friday, driven by slight increases in new car loans for the month.
According to the report, consumer credit on the month climbed by $18.6 billion, eclipsing analysts' expectations of $16.0 billion. It came one month after Fed reports showed that credit rose substantially by $13.4 billion in April.
During the month of May, non-revolving credit comprised of debt payments on items such as student loans and car loans increased by $16.2 billion. Non-revolving credit slowed somewhat in April after spiking by 8.7% in March. Over the first quarter, non-revolving credit payments increased by 6.9%, down considerably from 7.7% a year earlier.
At the same time, revolving credit inched up by $2.3 billion in May following an increase of $1.4 billion a month earlier. Revolving credit is a specific line of credit that is automatically renewed as debts are paid off. During the first three months of the year, revolving credit rose moderately following a spike of 13.2% in March.
Economists sounded alarm bells in March when consumer credit surged by $29.7 billion, almost doubling analysts' estimates of $16 billion, coming in as the largest on record since the Fed began tracking the data. The spending spree was driven by an $11 billion binge in credit card debt on the month.
Last year, credit card debt in the U.S. soared by $71 billion annually to $917.7 billion, according to a report from CardHub.com, fueled by a $52 billion increase in the final quarter. In April, however, analysts from S&P/Experian suggested that U.S. consumers were doing a better job of taking care of mortgage and car payments, as mortgage default rates fell slightly and auto loan default rates remained relatively low.