US consumer credit has fallen for a seventh consecutive month, suggesting that Americans are paying down debt even as the economy starts to recover.

Consumer credit dropped at an annual rate of 5.8 per cent in August, the Federal Reserve said on Wednesday, slower than the 9.1 per cent rate in July but nevertheless faster than economists were expecting. Most of the drop was in so-called revolving debt such as credit cards, which fell almost $10bn at an annual rate of 13.1 per cent. The previous month it fell just $2.4bn.