Revolving credit balances are creeping up, indicating that consumers are more comfortable carrying debt and are able to access more credit as the U.S. economy bounces back.
March marked the seventh consecutive month of rising consumer credit balances, thanks to upticks in both revolving credit (mostly credit card balances) and non-revolving credit (car, personal, and student loan balances), according to the Federal Reserve’s latest consumer credit report released Friday. It’s also the first time both types of credit have increased in tandem since October 2019.
The U.S. revolving debt balance increased $6.4 billion in March to $980.4 billion, or at an annual rate of 2.4%. That’s the second consecutive month of rising balances after months of declines when many consumers were focused on paying down debt during the pandemic. Revolving credit balances are closer to where they were last fall, but still $117.1 billion lower than the record high reached in February 2020.
Non-revolving credit balances increased more substantially in March, climbing by $19.4 billion to $3.26 trillion, or at an annual rate of 7.2%. Total consumer credit debt is now at an all-time high: $4.24 trillion.