Revolving Debt Surges as Credit Card Rates Hit 18-Year High

2022-11-08T16:19:45-06:00

By David Logan on November 8, 2022 • According to the Federal Reserve’s latest G.19 Consumer Credit report, consumer credit growth (ex-real estate) decelerated to a seasonal adjusted annual rate (SAAR) of 6.8% in the third quarter of 2022 after growing at an 8.7% pace in the prior quarter.  Revolving debt increased at a 12.9% rate, more than double the pace of nonrevolving debt (+4.9%). Credit card interest rates reached 16.3%, the highest level since the inception of the data series in 1994. Total consumer credit currently stands at $4.7 trillion, an increase of $100 billion over the second quarter. Revolving and nonrevolving debt accounted for 24.7% and 75.3%, respectively, of non-revolving debt. Nonevolving credit outstanding increased $42.6 billion while the level of revolving debt rose $36.3 billion over the quarter. Between Q2 2020 and Q2 2021, revolving consumer credit outstanding as a share of the total steeply declined as stimulus checks were used to pay down credit card debt. The share has increased each quarter since. With every quarterly G.19 report, the Federal Reserve releases a memo item covering student and motor vehicle loans’ outstanding levels on a non-seasonally adjusted (NSA) basis. The most recent release shows that the balance of student loans was $1.8 trillion at the end of the third quarter while the amount of auto loan debt outstanding stood at $1.4 trillion. Together, these loans made up 88.9% of nonrevolving credit balances (NSA), down 0.1 percentage point from Q2 2022. Related ‹ Concentration of Large Builders in Metropolitan Markets- Update (2021)Tags: auto loans, consumer credit, consumer debt, credit, credit cards, Federal Reserve, interest rates, non-revolving debt, nonrevolving debt, revolving debt

Revolving Debt Surges as Credit Card Rates Hit 18-Year High2022-11-08T16:19:45-06:00

Steps to Boost Your Credit Score

2021-05-04T09:16:32-05:00

There aren’t shortcuts to improving your credit score. You’ll need to make sound financial decisions for at least several months to offset previous damage you’ve done to your credit record. But that doesn’t mean it can’t be done. Here are four steps to improve your score and increase the chances you’ll qualify for a favorable mortgage loan. Check Your Credit Report Verify that the items listed on your report—especially the negative ones—are correct. If there are mistakes, correcting them is an easy way to help your score. You can order free copies of your credit report at annualcreditreport.com. Pay Overdue Accounts Past-due balances are very damaging to your score. Pay off the debt or at least negotiate a plan to get those accounts current. Once current, those accounts will stop adding negative information to your credit report and can generate positive credit-score movement. Use Less of Your Available Credit Carrying a $2,000 balance on a Visa card with a $3,000 limit isn’t going to help your credit profile. Try to pay down those balances, if possible, to less than 50% of your available credit. Another option is to ask for a higher limit. If Visa raises the limit on that card to $6,000, your balance looks better—as long as you resist the urge to add to the balance on that card. Don’t Close Accounts This one is counterintuitive, but closing a credit card account lowers your available credit. Keep that card active and set it up to autopay one or two small, recurring bills, such as your Netflix membership. When you’re ready to start looking for a home, talk to a Texas REALTOR®. He or she can help you understand the many aspects of the homebuying process.

Steps to Boost Your Credit Score2021-05-04T09:16:32-05:00

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