CUs bolster share of revolving credit market

Nov. 8, 2007—Total credit union consumer lending increased from a non-seasonally adjusted $237.9 billion to $238 billion in September, with robust credit card activity helping credit unions raise their revolving credit market share to 3.18 percent.

The Federal Reserve reported Wednesday that overall consumer credit increased in September by $3.7 billion to $2.48 trillion, the smallest monthly increase since April. NAFCU Chief Economist Tun Wai noted the increase was about $5 billion less than what most economists had expected. “Revolving credit remains strong, but non-revolving credit was flat, primarily due to the absence of large-ticket items in consumer spending during the month,” Wai said.

At credit unions, non-revolving consumer lending decreased slightly by about $200 million to $208.8 billion, ultimately bringing credit unions’ share of the total consumer installment credit market down from 9.59 percent to 9.56 percent.

Consumers’ ability and willingness to extract equity from their homes has clearly continued to wane, said Wai, so it is not surprising they are increasingly turning to credit cards to make purchases. “Moving forward, rising gas prices will likely provide additional support to revolving credit numbers as consumers typically use credit cards at the pump,” the economist stated.

NAFCU is forecasting 4.8 percent growth in total consumer installment credit this year.