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Consumer credit grew by more than $20 billion in fourth quarter 2011

Ben Bernanke

A February statement released by the Board of Governors of the Federal Reserve showed that outstanding consumer credit grew by more than $20 billion in the fourth quarter of 2011.

Economists predicted that consumer credit would grow by approximately $7 billion in December. According to the report, however, consumer credit grew by $19 billion for an annual rate of approximately nine percent.

Total consumer credit increased over the fourth quarter at an annual rate of 7.6 percent, which, the Economic Populist reports, is due in large to student loans. Tuition costs rose by more than eight percent in 2011.

Revolving credit, which includes credit cards, increased at an annual rate of 4.1 percent. December was the fourth straight month of increased revolving credit.

These numbers are not necessarily good for those who are already heavily burdened by debt following the recent economic downturn.

“These credit card debt numbers are a concern, but it’s too early to tell whether we are all falling back into the trap of spending more than we can afford,” Bill Hardekopf, the president of the consumer financial education website Lowcards.com, said, according to AL.com.

Hardekopf said that even though the numbers may be a positive sign for the economy, “it could mean that people are struggling and have to rely on using their credit card to make ends meet,” AL.com reports.

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