The Federal Reserve’s latest G.19 Consumer Credit Report shows rising trends in consumer credit, excluding loans secured by real estate, through July 2019.
In July, consumer credit increased at a seasonally adjusted annual rate of 7 percent, the largest monthly percentage gain in its category in a year. 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 $23 billion from the previous month.
Revolving credit greatly accelerated from its sluggish pace last month, increasing by $10 billion at an annual rate of 11 percent (also the largest monthly percentage gain in its category since this time last year), while nonrevolving credit increased by $13 billion at an annual rate of 5 percent. On a non-seasonally adjusted basis, the report indicates that the greatest increase in revolving balances stemmed from depository institutions and in non-revolving balances from depository institutions and the federal government. The below figure shows the various debt flows to the two consumer credit categories in July 2019.
The largest component of non-revolving debt is that which is extended by the Federal Government. This manifests most prominently in the form of student loans, a long-established barrier to homeownership. In contrast, the federal government does not extend open-ended credit.
- 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.