Consumers Relying More On Plastic

[David A. Szwak]

Detroit Free Press
Consumers relying more on plastic
BY VINCENT DEL GLUDICE
BLOOMBERG
August 8, 2006
Consumer borrowing unexpectedly accelerated in June as Americans used credit cards to finance more of their purchases, Federal Reserve report showed Monday.

Consumer credit, or non-mortgage loans to individuals, rose $10.3 billion to $2.19 trillion following a revised $5.89-billion increase in May. The two-month gain was the biggest since September-October 2004.

Americans are relying more on credit-card debt because rising interest rates and a cooling housing market make it harder or them to take out home-equity loans. Higher prices at filling stations also are prompting consumers to borrow more, economists said.

The jump in consumer credit coming at a time when consumers are hard hit by soaring gasoline costs could indicate some financial woes on the part of borrowers,â€