ARLINGTON, Va.—Total consumer credit rose 4.7%, at a seasonally-adjusted, annualized rate, in July and is up 5.1% compared to a year ago. Revolving credit, primarily credit cards, rose 6.7% during the month and is up 0.6% compared to July 2020.
“On a seasonally-adjusted basis, consumer credit posted another strong month, marking five months of expansion,” said NAFCU Chief Economist and Vice President of Research. “Consumer credit growth has slowed compared to the past two months, indicating some consumer reluctance to spend amidst the Delta spread.
“Revolving credit especially took a hit, with annualized growth dropping two-thirds compared to last month. Nonrevolving credits slowed mostly due to new vehicle sales falling to their lowest rate since June 2020,” added Long.
Increase at Credit Unions
Total consumer credit for credit unions rose 0.7%, on seasonally-adjusted basis, in July, compared to a 0.9% rise for banks and 0.2% rise for financial companies. From a prior year, total consumer credit at credit unions rose 4.2% while banks experienced a 4% gain and a 5.9% rise for financial companies.
During the past 12 months credit unions’ share of the market was unchanged at 12.2%. Meanwhile, banks’ share fell by 0.1 percentage points to 40%, while financial companies share rose by 0.2 percentage points to 13.4%.
“NAFCU expects consumer credit to continue to grow through the rest of the year, particularly in revolving credit as the job market improves and spending patterns are restored,” Long concluded. “Nonrevolving credit will suffer from auto supply issues into next year.”