That's equivalent to an annual decline of 10.4 percent, the Federal Reserve said. It's the sixth consecutive month the measure of consumer credit has contracted. In June, it fell by a revised 7.5 percent.

Both Visa and MasterCard say the proportion of debit transactions on their networks is growing. At Visa, the world's largest payment network, they've surpassed credit card purchases.

Revolving credit, comprising mostly credit card balances, fell eight percent in July. Meanwhile, non-revolving credit fell 11.7 percent.