Led by the Highest Interest Rates on Credit Cards Since 1994, Revolving Debt Surges in Q3

According to the Federal Reserve’s latest G.19 Consumer Credit Report, with additional analysis provided by the National Association of Home Builders (NAHB), US consumer credit (less real estate) grew at a seasonally adjusted annual rate (SAAR) of 6.8% in 22Q3. Revolving debt increased at a rate of 12.9%, which is more than double the pace of nonrevolving debt at 4.9%. Credit card interest rates reached their highest level since the start of the data series in 1994, at 16.3%.

Total consumer credit currently stands at $4.7 trillion, an increase of $100 billion over Q2. Revolving and nonrevolving debt accounted for 24.7% and 75.3% of total consumer debt, respectively. Nonevolving credit outstanding increased to $42.6 billion, while the level of revolving debt rose $36.3 over the quarter. Between 20Q2 and 21Q2, revolving consumer credit outstanding as a shore of the total steeply declined as stimulus checks were used to pay down credit card debt. The share has increased each quarter since then.

The G.19 reports separately on student and motor vehicle loan’s outstanding levels on a non-seasonally adjusted (NSA) basis. The most recent release shows that the balance of student loans was $1.8 trillion at the end of Q3, and auto loan debt outstanding was at $1.4 trillion. Combined, these loans made up 88.9% of nonrevolving credit balances (NSA), down 0.1% from 22Q2.