Released: February 08, 2006

Consumer borrowing with credit cards slows

Loans against homes rose in 2005

Source: Bloomberg News

Consumer borrowing rose nationally last year at the slowest pace since 1992 as Americans relied less on credit cards and more on loans against the value of their homes.

Consumer credit, or non-mortgage loans to individuals, increased by 3 percent in 2005 to $2.16 trillion, the smallest percentage gain since a 1 percent rise 13 years ago, the Federal Reserve said in a report Tuesday.

Borrowing in December rose for a second month, by $3.35 billion, after climbing a revised $568 million in November.

Consumer borrowing with credit cards slowed over the past five years as Americans tapped lower-cost home-equity loans. The share of cash-out refinancing in the fourth quarter for loans owned by Freddie Mac rose to the highest level in five years, suggesting homeowners are still using property to finance spending.

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