Consumer Credit Report Shows Acceleration of Revolving Debt


The Federal Reserve’s latest G.19 Consumer Credit Report shows rising trends in consumer credit, excluding loans secured by real estate, through May 2019. As of May 31, 2019, consumer credit totaled $4.1 trillion on a seasonally adjusted basis, with $1.1 trillion in revolving debt1 and $3.0 trillion in nonrevolving debt2. This is an increase of $17 billion from the previous month. In May, consumer credit increased at a seasonally adjusted annual rate of 5 percent. Revolving credit increased at an annual rate of 8-1/4 percent, while nonrevolving credit increased at an annual rate of 4 percent. Unlike previous updates by the Federal Reserve on consumer credit, the current report has minor revisions to historical data.

The increase in nonrevolving debt is a good sign for sentiment of American consumers, as it signifies that they are confident and willing to make larger purchases, including houses. At the same time, American consumers are also increasing their credit card purchases and opening of credit card accounts. For the first time in 5 months, as of April 2019, revolving debt increased from the previous month at a faster rate than nonrevolving debt. The trend continued in May. Interestingly, in May, there was also a series of declines in purchase mortgages, per the Mortgage Bankers Association’s weekly reports. One possibility is that the freeing of this type of nonrevolving debt has made other nonrevolving debt loans more appealing.

  1. According to the Federal Reserve’s G.19 Consumer Credit report, revolving credit plans, which are largely composed of credit card debt but also include home equity lines of credit (HELOCs), 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.
  2. According to the Federal Reserve’s G.19 Consumer Credit report, 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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