ARLINGTON, Va.—Total consumer credit rose 7.1% at a seasonally adjusted, annualized rate during November and is up 7.9% compared to a year ago, NAFCU reported, citing Federal Reserve data.
Revolving credit – primarily credit cards – rose 16.9% and is up 14.9% compared to November 2021. Non-revolving credit – primarily auto loans and education loans – rose 3.9% during the month and is up 5.8% from a year ago.
“Consumer credit balances grew by $28 billion in November, much faster than experts predicted,” said NAFCU Chief Economist and Vice President of Research Curt Long. “Revolving debt grew at an accelerated pace of 16.9% as households conducted holiday shopping.
“Although consumer sentiment remains low, workers are confident in their job situations and willing to spend and absorb more debt. Average credit scores for loan originations rose in recent years but are beginning to drift back to pre-COVID levels,” added Long.
What the Data Show
According to the data, total consumer credit for credit unions rose 0.3% in November, compared to a 1.7% gain for banks and 0.4% increase for financial companies. From a year prior, total consumer credit at credit unions rose 17.5%, while banks experienced a 11.2% gain and financial companies grew 0.2%.
Over the past 12 months, credit unions’ share of the market rose 1.1 percentage points to 13.1%. Banks’ share rose 1.4 percentage points to 42.2%, and financial companies' share fell 0.9 percentage points to 12.2%, according to the data.
“NAFCU expects consumer credit to continue expanding in the first half of 2023, but growth is likely to slow due to tighter credit provision,” concluded Long.
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