Consumers Pull Back on Credit Card Debt, Fed Data Shows
In a sign U.S. consumers are increasingly wary of credit card debt, the country’s total revolving credit balance fell for the seventh time in eight months, sliding an annualized 6.7% to $979.6 billion in October—the lowest level since May 2017.
The revolving credit figure—primarily a measure of credit card balances—has declined almost every month since the COVID-19 pandemic began, with only a slight uptick in September. The Federal Reserve’s latest consumer credit report, released Monday, suggests consumers are exercising even more discipline as the recovery in the labor market slows and COVID-19 cases rise. The country still has almost 10 million fewer jobs than it did before the COVID-19 lockdown.
Declines over the past year would indicate that Americans are “reducing their willingness to take on more credit and likely paying down some of their existing balances,” Chad Moutray, chief economist for the National Association of Manufacturers, wrote on Twitter after the report was released.
Non-revolving credit, which includes car and student loans, increased by an annualized rate of 4.8% to $3.18 trillion in October.