Non-revolving Credit Continues Growing, but Revolving Credit Declines

The total amount of consumer credit outstanding expanded for the 19th consecutive month, but growth in March occurred at a slower rate than in previous months. According to the Federal Reserve Board, consumer credit outstanding grew at a seasonally adjusted annual rate of 3.5% in March to $2.8 trillion. In February, consumer credit rose by 8.0% and by 5.5% in January. Over the first quarter of 2013, consumer credit rose by a seasonally adjusted annual rate of 5.7%. This rate of growth was slightly lower than then 6.5% growth rate measured in the fourth quarter of 2012, but higher than the 4.9% rate of growth observed in the third quarter of 2012.

Presentation1

The March increase in consumer credit outstanding reflected a 5.9% rise in non-revolving credit. Non-revolving consumer credit outstanding rose to seasonally adjusted $2.0 trillion. Non-revolving credit is largely composed of automobile loans and student loans, but also includes secured or unsecured loans for manufactured housing, boats trailers, and vacations. In February, non-revolving credit outstanding grew by 11.3% and in January it rose by 6.9%. Over the first quarter of 2013, non-revolving credit rose by a seasonally adjusted annual rate of 8.1%. The first quarter growth rate was slightly lower than then 9.3% growth observed in fourth quarter of 2012, but higher than 6.9% growth rate that occurred in the third quarter of 2012.

The expansion in non-revolving consumer credit that was recorded in March was partly offset by a decline in revolving credit. Revolving credit is largely composed of credit cards. In March, revolving credit declined by a seasonally adjusted annual rate of 2.4% to $0.8 trillion. This is the first monthly decline in revolving credit outstanding since December 2012. Following a month-over-month decline in December 2012, revolving credit grew by 2.3% in January and by 0.6% in February. Over the first quarter of 2013, revolving credit outstanding rose by a seasonally adjusted annual rate of 0.2%, below the 0.3% growth rate that recorded in the fourth quarter of 2012 and the 0.4% growth rate that took place in the third quarter of 2012.



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