Consumer Credit Balances Rose in August, at Slower Pace

Spending faltered as COVID-19 cases rose over the summer

Woman managing online banking with smartphone and making mobile payment with credit card on hand while having meal in a restaurant
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Revolving credit balances in the U.S. topped $1 trillion in August, but growth slowed as the fast-spreading delta variant curbed consumer spending.

Consisting mostly of credit card debt, revolving credit balances grew at an annual rate of 3.6%, the smallest month-to-month change since April, according to a Federal Reserve report, released Wednesday. August’s $3 billion increase—the fourth straight gain—brings balances to more than $1 trillion, closer to  the pre-pandemic peak of $1.1 trillion.

Earlier in the year, when vaccines became more widely available, consumers were optimistic life would return to normal and started spending again on restaurants, bars and travel. They pulled back, however, when the delta variant of the COVID virus set off a spike in infections. . 

Non-revolving credit balances, including car, personal, and student loans, increased at the same rate in August as July, climbing an annualized 4.1%, to $3.35 trillion.

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