WASHINGTON–Consumer credit hit a record high of $4.82 trillion in February, according to new data released by the Federal Reserve, continuing a debt trend that emerged at the beginning of 2022, even as interest rate increases have only made that debt more expensive.
But the pace of credit growth has slowed.
According to the Fed, outstanding consumer revolving credit, primarily credit card balances, as well as auto loans, rose 5% over February, 2022, compared with January’s 12.7% jump and December’s 8.4%, according to the Fed report.
"Consumer credit growth slowed in February. After an 8.4% increase in December and a revised 12.5% increase in January, revolving debt rose by only 5% in February, which was the main factor behind the slower growth of total credit,” said NAFCU Chief Economist and VP-Research Curt Long. “Nonrevolving consumer credit remained muted as auto sales have stalled. However, according to the National Student Clearinghouse Center, college enrollment appears to be stabilizing, which could buoy that segment going forward. Following recent bank failures, there has been speculation that lenders will tighten underwriting standards, and the coming months of consumer credit data will be scrutinized for evidence of such. However, as long as the labor market remains in good shape, consumer credit still has room for modest expansion."
Fewer Mortgages, Student Loans
While Americans are taking out increasing amounts of credit card debt, the data show mortgages and student loans are rising more slowly, jumping 3.4% in February compared to 1.7% and 2.2% in December and January respectively, according to the Fed.
Total consumer credit has risen $34.8 billion since December to a total of roughly $4.82 trillion, which comes to about a quarter