May 10, 2022

March consumer credit growth shows largest gain since December 2010

Data flashTotal consumer credit rose 14 percent, at a seasonally adjusted, annualized rate, in March and is up 7.5 percent compared to a year ago. Revolving credit - primarily credit cards - rose 35.3 percent this month and is up 13.6 percent compared to March 2021. Non-revolving credit – primarily auto loans and education loans – rose 7.4 percent this month and is up 5.7 percent from a year ago.

“Consumer credit growth saw its largest gain since December 2010, rising by over $52 billion,” said NAFCU Chief Economist and Vice President of Research Curt Long, in the latest Macro Data Flash report. “Revolving debt surged by over 35 percent in March on an annualized basis. Despite the rise, outstanding revolving debt is still just shy of its February 2020 level.  

"Had the pre-COVID trend held, revolving debt would be roughly 7 percent higher than its actual level today," added Long. "The March spike likely reflects the recent surge in inflation – particularly in gas prices – that is taking a toll on household finances.”

Total consumer credit for credit unions rose 1.4 percent, on a seasonally adjusted basis, in March, compared to a 1.6 percent gain for banks and 0.7 percent decrease for financial companies. From a year prior, total consumer credit at credit unions rose 8.7 percent, while banks experienced a 12.8 percent gain and financial companies rose 2.0 percent.  

Over the past 12 months, credit unions’ share of the market rose 0.1 percentage points to 12.2 percent. Banks’ share rose by 1.9 percentage points to 41.1 percent, and financial companies' share fell by 0.6 percentage points to 12.9 percent.  

“According to the Federal Reserve's first quarter survey of bank lending officers, banks eased standards on credit card loans during the quarter with a significant net share reporting stronger demand,” added Long. "The non-revolving segment decelerated due to continued low auto inventories crimping sales.

"Despite rising interest rates, NAFCU expects non-mortgage consumer debt to expand at a solid pace over the remainder of the year due to high inflation and spare borrowing capacity on household balance sheets," concluded Long.

For more up-to-date economic insights from NAFCU's award-winning research team, view NAFCU's Macro Data Flash reports