ARLINGTON, Va.—Total consumer credit fell 3.8% in August at a seasonally-adjusted annualized rate and is up 4% compared to a year ago.
In addition, new data show revolving credit – primarily credit cards – rose 13.9% and remains 10.6% higher than August 2022. Non-revolving credit – primarily auto and education loans – fell 9.2% in August but is up 1.9% from a year ago.
“Consumer credit fell in August, the second decline in four months. Interest on student loans began accruing again in September, leading many consumers to make principle pay downs in August,” said NAFCU Vice President of Research and Chief Economist Curt Long. “This roughly $30 billion paydown on nonrevolving credit was partially offset by a nearly $15 billion increase in revolving credit. Consumer delinquencies have normalized, and while there are certainly headwinds at the household level, a recent survey by the Federal Reserve Bank of New York found that household expectation for delinquencies remain anchored to their pre-COVID level. However, households are much less optimistic about attaining credit than in 2019.”
Growth at Credit Unions
Total consumer credit for credit unions grew 0.6% in August. Banks experienced no growth, and 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 13.4%. Banks’ share rose 0.6%, and finance companies’ share remained at 14.4%.
“NAFCU expects growth in consumer debt to continue to moderate due to cuts in credit supply,” Long concluded.
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