Revolving Debt Expands in October

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The Federal Reserve’s latest G.19 Consumer Credit Report shows rising trends in consumer credit, excluding loans secured by real estate, through October 2019.

In October, consumer credit increased at a seasonally adjusted annual rate of 5.5 percent from the previous month, with revolving debt1 increasing by 8.8 percent and nonrevolving debt2 increasing by 4.3 percent. Consumer credit totaled $4.2 trillion on a seasonally adjusted basis, with $1.1 trillion in revolving debt and $3.1 trillion in nonrevolving debt. This is an increase of $18.9 billion from the previous month.


The above figure shows a surge in revolving debt in October. On a non-seasonally adjusted basis, revolving debt totaled $1.1 trillion, with $945 billion of balances held at depository institutions, $23 billion at finance companies, $65 billion at credit unions, and $20 billion at non-financial businesses. The largest increase from the previous month occurred in the revolving balances held at depository institutions, by about $8 billion. On the other hand, non-revolving debt increased only moderately. This is more reflective of the changes in non-revolving debt being generally less on a percentage basis than revolving debt. In depository institutions, as of October, revolving balances accounted for 55% of all holdings, with the rest of the holdings being non-revolving balances.


Notes:

  1. Revolving credit plans are largely composed of credit card debt but also include home equity lines of credit (HELOCs). These may be unsecured or secured by collateral and allow a consumer to borrow up to a prearranged limit and repay the debt in one or more installments. The G.19 Consumer Credit report excludes HELOCS and home equity loans, as they are secured by real estate.
  2. Nonrevolving credit is closed-end credit extended to consumers that is repaid on a prearranged repayment schedule and may be secured or unsecured.


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