Consumer credit plunges despite low interest rates

Consumer credit plunged by $9.15 billion, suggesting that Americans are still wary of taking on new debt.

U.S. consumer credit plunged in May and was revised down sharply for the prior month, suggesting Americans are still leery of taking on new debt despite rock-bottom interest rates.

The Federal Reserve said on Thursday total outstanding credit to U.S. consumers, everything from car loans to credit cards, fell $9.15 billion, much sharper than forecasts for a $2 billion decrease. April's reading was revised to a hefty $14.86 billion drop from the originally reported rise of $1 billion.

Consumer credit peaked around $2.58 trillion in July 2008, just before a worsening of the credit crisis brought down financial giants like Lehman Brothers and American International Group Inc. Since then, it has dropped by more than $160 billion.

Revolving credit, mainly credit card accounts, was down $7.32 billion, while non-revolving loans for things like cars, boats and a college education fell $1.82 billion.