Fed Says Consumer Credit Grew 4.3% in June

Consumer credit grew at a seasonally adjusted annual rate of 4.3% in June.

Revolving credit decreased at an annual rate of 0.6% during the month, while nonrevolving credit increased by 6.0%, the Federal Reserve said in a Monday (Aug. 7) statistical release.

Consumer credit includes most credit extended to individuals, other than loans secured by real estate, according to the release. Nonrevolving credit includes motor vehicle loans and all other loans not included in revolving credit.

The previous month, May, had seen consumer credit grow at an annual rate of 2.3%, with revolving credit rising 8.1% and nonrevolving credit up 0.3%, the release said.

In June, total outstanding consumer credit totaled about $5 trillion, up from $4.98 trillion in May, per the release. That total included $1.26 trillion of revolving credit and $3.73 trillion of nonrevolving credit, which were down slightly and up, respectively, from May.

PYMNTS research has found that credit has been a staple of managing day-to-day financial life, with millennial and Gen Z consumers being the ones most likely to have increased their use of credit products in the last year.

Some 44% of millennials reported using credit “significantly more” than they had done in the past, followed by more than a third of Gen Z consumers, according to “The Credit Economy: How Younger Consumers Make Credit Decisions,” a PYMNTS and i2c collaboration.

Those tallies were the highest across all generations, the report said.

In a testament to consumer resiliency, credit card late payments and other delinquencies have remained low, despite the prolonged challenge of doing more with less.

Charge-offs and write-offs reported by banks have hovered at manageable levels, despite individual and global headwinds that include wages failing to keep pace with rising prices and inflation taking longer than expected to slow, according to “Credit Card Use During Economic Turbulence,” a PYMNTS and Elan Financial Services collaboration.

This report found that 45% of surveyed consumers make only minimum or partial payments, leaving themselves vulnerable to rising interest rates. The other 55% of consumers pay their balance in full each month, per the report.