ARLINGTON, Va.—Total consumer credit rose 14%, at a seasonally adjusted, annualized rate in March and is up 7.5% compared to a year ago.
Revolving credit - primarily credit cards - rose 35.3% and is up 13.6% compared to March 2021. Non-revolving credit – primarily auto loans and education loans – rose 7.4% in March and is up 5.7% from a year ago, according to new federal data.
“Consumer credit growth saw its largest gain since December 2010, rising by over $52 billion,” said NAFCU Chief Economist and Vice President of Research Curt Long. “Revolving debt surged by over 35% in March on an annualized basis. Despite the rise, outstanding revolving debt is still just shy of its February 2020 level.
"Had the pre-COVID trend held, revolving debt would be roughly 7% higher than its actual level today," added Long. "The March spike likely reflects the recent surge in inflation – particularly in gas prices – that is taking a toll on household finances.”
Total consumer credit for credit unions rose 1.4%, on a seasonally adjusted basis, in March, compared to a 1.6% gain for banks and 0.7% decrease for financial companies. From a year prior, total consumer credit at credit unions rose8.7%, while banks experienced a 12.8% gain and financial companies rose 2.0%.
CU Share Up Slightly
Over the past 12 months credit unions’ share of the market rose 0.1 percentage points to 12.2%. Banks’ share rose by 1.9 percentage points to 41.1%, and financial companies' share fell by 0.6 percentage points to 12.9%.
“According to the Federal Reserve's first quarter survey of bank lending officers, banks eased standards on credit card loans during the quarter with a significant net share reporting stronger demand,” added Long. "The non-revolving segment decelerated due to continued low auto inventories crimping sales. Despite rising interest rates, NAFCU expects non-mortgage consumer debt to expand at a solid pace over the remainder of the year due to high inflation and spare borrowing capacity on household balance sheets.”
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