Revolving Debt Climbs as Credit Card Interest Rates Set New Records

2023-01-10T13:21:20-06:00

By David Logan on January 10, 2023 • The balance of consumer credit outstanding grew 7.1% in November 2022 (seasonal adjusted annual rate) after climbing 7.4% (SAAR) in October according to the Federal Reserve’s latest G.19 Consumer Credit report.  Revolving debt—which consists primarily of credit card debt—increased at a 16.9% rate, more than four times the growth of nonrevolving debt (excluding real estate) which grew 3.9% (SAAR). Credit card interest rates climbed 1.97 percentage points—or 197 basis points—to 20.4% between August and November 2022, following a 178 basis point increase between May and August (credit card terms are only released in February, May, August, and November). Prior to August 2022, the largest three-month increase in the series—which dates back to 1994—was a 98 basis point increase in May 1995. Total consumer credit currently stands at $4.76 trillion, an increase of $28 billion over the month and $349 billion, year-over-year. Nonevolving credit outstanding increased $11.5 billion while the level of revolving debt rose $16.5 billion over the month. Revolving and nonrevolving debt accounted for 25.0% and 75.0% of total consumer debt, respectively.  Between November 2021 and November 2022, revolving consumer credit outstanding as a share of the total increased 1.6 percentage points after reaching its most recent low of 22.9% in May 2021. Related ‹ How Many Households Are Priced Out By Higher Mortgage Rates in 2022?Tags: auto loans, consumer credit, credit card debt, credit cards, g.19, household balance sheets, household debt, nonrevolving debt, revolving debt, student loan debt

Revolving Debt Climbs as Credit Card Interest Rates Set New Records2023-01-10T13:21:20-06:00

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

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