U.S. consumers’ total revolving credit balances fell in January to their lowest level since the start of 2017 as people used their latest stimulus checks to pay off debt.
January total revolving credit balances, which are primarily from credit cards, dropped 12.2% from the February 2020 record high near $1.1 trillion to $965.1 billion. This was the fourth consecutive month of decline.
“Funds from the most recent fiscal rescue package, namely the $600 stimulus checks, were distributed in January and help explain the declining balances in revolving credit, which includes credit cards,” wrote Matt Colyar, associate economist at Moody’s Analytics, in a commentary.
Overall consumer credit fell $1.3 billion from December, far below the consensus expectation of a $12 billion expansion, according to Moody’s Analytics, while non-revolving credit increased at an annual rate of 3.2% to $3.21 trillion in January.