Upward Trend in Consumer Credit Continues Through February

U.S. consumers kept up a booming pace of buying on credit during February, particularly for autos, the Federal Reserve said Wednesday.

Consumer installment credit expanded by $8.7 billion, or an annualized rate of 7.9%, after a revised $15.3-billion, or 14.1%, jump in January--the largest increase in more than three years.

The report came as a new study showed that credit card issuers stuffed the mailboxes of U.S. consumers with a record 3.5 billion offers for plastic in 1998, a 15% increase from the previous year.

Direct-mail offers of credit cards reached 75% of households last year, up from 69% in 1997, according to BAI Global Inc., a Tarrytown, N.Y.-based market research company.

Consumers accepted 1.2% of the offers, submitting 41 million card applications, up from 39 million in 1997, BAI Global said.

The February rise in consumer credit was far above Wall Street analysts’ forecasts for a $5.6-billion increase.

Auto loans grew by $5.2 billion--a 13.7% annualized rate--in February after a $7.1-billion, or 19%, surge in January. Credit card debt increased by $2.3 billion, a 4.8% rate, in February--less than half January’s rise of $6.2 billion, or 13.2%.

Other credit, which includes consumer bank loans such as those for mobile homes and education tuition but not real estate mortgages, grew by $1.2 billion, a 5.1% annualized rate, in February after a $2-billion, or 8.2%, rise in January.