ARLINGTON, Va.—New data show total consumer credit grew 6.6% at a seasonally adjusted, annualized rate in March and is up 7.3% compared to a year ago.
Revolving credit – primarily credit cards – rose 17.3% and is up 14.1% compared to March 2022. Non-revolving credit – primarily auto loans and education loans – rose three% during the month and is up 5.1% from a year ago, the data show.
“Consumer credit surged in March by $26.5 billion, far exceeding experts' forecasts. After a 5.7% increase in February and a 13.6% increase in January, revolving debt expanded by 17.3% in March, resulting in one of the largest spikes in credit card balances on record,” said NAFCU Chief Economist and Vice President of Research Curt Long.
Additional Data Points
According to the new numbers, total consumer credit grew 0.4% in March for both credit unions and banks, with a 0.1% increase for financial companies. From a year prior, total consumer credit at credit unions rose 17.6%, banks experienced a 9.5% gain, and financial companies grew 0.7%.
Over the past 12 months, credit unions’ share of the market rose 1.1 percentage points to 13.4%. Banks’ share rose 0.8 percentage points to 41.8%, and financial companies' share fell 0.8 percentage point to 12%, the data show.
‘Demand Should Remain Elevated’
“With a strong labor market, loan demand should remain elevated,” said Long. “However, recent bank stresses may result in constrained credit provision. The Federal Reserve's first quarter Senior Loan Officer Opinion Survey revealed that banks expect to tighten loan standards over the course of 2023, with mid-sized banks tightening more than large banks due to liquidity concerns.”
Additional details on what was revealed in the latest Loan Officer Survey can be found here.
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