The Federal Reserve’s latest G.19 Consumer Credit Report shows trends in consumer credit, excluding loans secured by real estate, through July 2020.
Consumer credit increased at a seasonally adjusted annual rate of 2.6% from the previous month, with revolving debt1 decreasing by slightly less than 0.5% and nonrevolving debt2 increasing by 4.8 percent. Consumer credit totaled $4.1 trillion on a seasonally adjusted basis, with $994 billion in revolving debt and $3.1 trillion in nonrevolving debt. This is an increase of $12 billion from the previous month, with non-revolving credit increasing by $12.5 billion and offset by a marginal decrease in revolving debt by $293 million. This month marks the fifth straight month of declines in the level of open-ended credit.
Despite the decline for revolving debt, the latest decrease has been minimal, down only by $293 million from the previous month. This suggests more consumer certainty in short-term financial outlook than had existed in months prior, as open-ended credit is usually assumed to be paid down faster.
Depository institutions (commercial banks) are consumers’ largest source for revolving credit, with their share of holdings totaling $853 billion or 90% on a non-seasonally adjusted basis. Credit unions, non-financial businesses, and finance companies make up the rest of the holdings of revolving credit, with shares trailing at 6.4%, 2.2%, and 2%, respectively.
- 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.
- Nonrevolving credit is closed-end credit extended to consumers that is repaid on a prearranged repayment schedule and may be secured or unsecured.