Consumer credit card borrowing falls again in July

WASHINGTON - Consumer borrowing fell again in July as households cut back on their credit card use for a 23rd consecutive month, adding more drag on an economy struggling to mount a sustained rebound.

Borrowing dropped at an annual rate of $3.6 billion in July, the Federal Reserve reported Wednesday. That marked the 17th drop in credit in the past 18 months.

Americans did boost borrowing for auto loans in July but this gain was offset by further reductions in the category that includes credit cards.

The latest drop in overall borrowing was slightly higher than economists' expectations and followed a $1.02-billion decline in June. The July decrease represented a 1.8 percent decline in percentage terms and followed a 0.5 percent drop in June. The only increase in credit since January 2009 was a small 1 percent rise this past January.

Borrowing in the category that includes auto loans rose 0.6 percent in July after gains of 3.2 percent in June and 1.2 percent in May.

Borrowing on credit cards fell by 6.3 percent in July after a bigger 7.5 percent June decline. This category has now fallen for a record 23 consecutive months as Americans have struggled to repair their household finances after the worst recession since the 1930s.

The long stretch of declining borrowing has left total consumer credit at an annual level of $2.42 trillion, 6.3 percent below the peak set in July 2008 of $2.58 trillion in credit.

The Fed's credit report covers debt not secured by real estate, thus excluding mortgages or home equity lines of credit.- AP