ARLINGTON, Va.—Total consumer credit rose 6.5% at a seasonally adjusted, annualized rate in September and is up 7.9% compared to a year ago.
Revolving credit – primarily credit cards – rose 8.7% and is up 5.8% compared to September 2021. Non-revolving credit – primarily auto loans and education loans – rose 5.7% during the month and is up 5.8% from a year ago.
“Revolving debt is still growing at a rapid clip, but September’s growth was the second slowest in the past year,” said NAFCU Chief Economist and Vice President of Research Curt Long. “Higher rates are discouraging households from taking on debt, while lenders are showing greater reluctance to extend credit in the face of a potential recession in 2023.
"In the Federal Reserve’s latest Senior Loan Officer Opinion Survey, ‘moderate net shares of banks reported tightening lending standards for credit card loans and other consumer loans,” Long continued. “Meanwhile, non-revolving debt has been growing at a more modest pace, but it accelerated somewhat in September.”
CU Share Rises
Total consumer credit for credit unions rose 1.8%, on a seasonally adjusted basis, in September, compared to a 0.3% gain for banks and 0.2% increase for financial companies. From a year prior, total consumer credit at credit unions rose 17.5%, while banks experienced a 12.3% gain and financial companies fell 1.1%, the NAFCU analysis states.
According to the trade group, over the past 12 months, credit unions’ share of the market rose 1.1 percentage points to 13.1%. Banks’ share rose 1.6 percentage points to 41.8%, and financial companies' share fell 1.1 percentage points to 12.2%.
"With auto production beginning to improve, that segment looks likely to continue to grow steadily," concluded Long. “NAFCU expects consumer credit to keep expanding in the fourth quarter as households tap available credit during the holiday shopping season, but growth is likely to slow due to tighter credit provision.”
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