ARLINGTON, Va.—Total consumer credit grew 2.5% in July at a seasonally-adjusted, annualized rate and is up 4.9% compared to a year ago, according to new data. Total consumer credit at credit unions grew 0.6% in July.
In addition, while revolving credit – primarily credit cards – rose 9.2%, it remains 10.2% higher than July 2022. Non-revolving credit – primarily auto and education loans – rose 0.2% in July and is up 3% from a year ago.
“Consumer credit growth slowed in July, which continues a gradual deceleration trend over the past nine months,” said NAFCU Vice President of Research and Chief Economist Curt Long. “Student loans are a large part of the slowdown, and consumer credit owned at the federal level – most of which represents student loans – fell for the sixth consecutive month in July. Revolving credit growth remains high despite the modest drop. This is prompting fears that stresses may arise at the household level due to greater borrowing in a higher interest rate environment.”
CUs Vs. Banks Vs. Finance Companies
With consumer credit at CUs up 0.6% in July, banks experienced 0% growth, while finance companies saw a gain of 0.6%. From a year prior, total consumer credit at credit unions rose 10.5%, while banks experienced a 5.7% gain and financial companies grew 4.4%.
Over the past 12 months, credit unions’ share of the market rose 0.7% to 13.3%. Banks’ share rose 0.3%, and finance companies’ share remained at 14.4%.
“With the labor market as strong as it is, consumers have greater capacity to add debt, but lenders report tightening loan standards for consumer credit. NAFCU expects growth in consumer debt to continue to moderate due to cuts in credit supply,” Long concluded.
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