Revolving Consumer Credit Jumps by Most on Record

Balances Haven’t Fully Returned to Pre-Pandemic Levels, Though

Balances on credit cards and other revolving consumer loans haven’t recovered to pre-pandemic levels, but November marked a record climb. 

Revolving credit balances—consisting largely of credit card debt—climbed $19.8 billion from October to $1.04 trillion, an annualized growth rate of 23.4%—the highest surge for at least the previous two decades of data collected, the Federal Reserve stated Friday.12 Balances still aren’t back to the $1.1 trillion seen in February 2020, just before COVID-19 shutdowns placed a check on spending, but the strong upswing takes them closer.

Early in the epidemic, individuals had few places to go out and spend money and at the same time, government stimulus supplied them with money that many used to pay off debt. But then individuals began moving around more freely and stimulus packages started to expire. 

November’s uptick likely was attributable partially to better confidence in the economy after the delta form of the coronavirus fuelled a surge in cases in late summer, said Shandor Whitcher, an economist at Moody’s Analytics. Cases have soared again after the omicron variant surfaced in late November. 

“Growth may slow in the subsequent months as consumers tighten their belts during the Omicron wave,” Whitcher noted in a commentary.

Total outstanding consumer credit, which includes both revolving and nonrevolving credit like auto and student loans, increased by $39.9 billion in November from October, an annualized rate of 11%. The rise was more than double economists’ expectations for a $19.5 billion gain, according to Moody’s Analytics.  Nonrevolving credit rose $20.1 billion, an annual rate of 7.2%.

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