ARLINGTON, Va.—Total consumer credit rose 3.3% in September – somewhat of a deceleration from previous months. Revolving credit (primarily credit cards) fell for the fifth time this year, decreasing 0.4% in September, as interest rates continue to rise, a new report shows.
NAFCU Chief Economist and Vice President of Research Curt Long pointed out in a NAFCU Macro Data Flash report that the average rate for commercial bank credit
card balances reached 14.4% in the third quarter – the highest since 2001 – according to the Federal Reserve.
Non-revolving credit (primarily auto and education loans) rose 4.7% in September. Long noted that "student loan growth has decelerated in recent years as the tight labor market attracts more potential students." He added that growth of auto loans is also expected to slow, "in part due to higher borrowing costs and tighter credit conditions."
Total consumer credit increased 7% in August and 5.4% in July (all seasonally adjusted annual rates).
Total consumer credit for credit unions increased 0.7% in September from the previous month, compared to a 0.1% increase for banks and a 0.4% decline for financial companies. In the third quarter, total consumer credit at credit unions rose 3.7%, while banks saw a 1.2% increase and financial companies had 0.4% growth, Long said.
Credit unions' share of the total consumer credit market edged up to 11.6% in September, up from 10.9% a year ago. Meanwhile, financial companies' market share fell from 14.4% to 13.5% over the past year, while banks' share remained unchanged at 41.1%.