Economic Report: Big jump in credit-card use drives 11-month high for consumer credit growth

A customer uses a chip credit card terminal at Walmart in Burbank, Calif.

Thanks to credit-card usage, consumer credit grew at the fastest rate in 11 months, the Federal Reserve said Friday.

Consumer credit grew at a seasonally adjusted annual rate of 7.7% in October, the Fed said, a gain of $25.38 billion.

Revolving credit such as credit cards grew at a 10.7% rate, while nonrevolving credit, like student and auto loans, rose at a 6.7% rate.

It was only the third month ever in which revolving credit exceeded a $1 trillion annual rate, and the first time since January. Revolving credit can be erratic, and it grew at just a 2.1% clip in the third quarter.

Though credit-card usage can be perilous, economists generally welcome a rise, as it suggests a desire to spend. Consumer confidence has remained near decade highs amid a strong jobs market.

Read: Consumer sentiment index holds near highs in December

By contrast, the 6.7% growth in nonrevolving credit was basically the same pace as the 6.6% growth in the third quarter.

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