March consumer credit growth shows largest gain since December 2010
Total 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.
Growth & Retention
Add to Calendar 2023-09-22 14:00:00 2023-09-22 14:00:00 Understanding Credit Card Portfolio Sales & Agent Programs Both credit union and bank credit card issuers are under intense pressure from various sources, including competitor innovation, significant internal resource commitments, increasing operating expenses, uncertain regulatory and economic environments and a variety of capital and liquidity constraints. This has led to about 80% of all banks offering credit cards under an ‘agent issuing’ model, where a third-party issues credit cards under the financial institution’s name. While hundreds of credit unions do the same, and interest in this option has increased in the last two years, the majority of credit unions still own and manage this product themselves. Deciding whether this option can meet strategic, financial and member needs can be difficult to untangle. In this webinar, Understanding Credit Card Portfolio Sales & Agent Programs, you’ll delve into the structure of such programs, the financial and risk-profile impacts of such a decision, the contractual commitments required of both parties and discover evaluation tips and processes for any credit union that would like to evaluate this path. Key Takeaways Discover the structure of the agent issuing concept and obligations of both parties Understand the financial impact of entering such a program to the balance sheet, income statement, and critical performance ratios Ascertain the impacts to members, including both positive and negative possibilities Review the accompanying contractual structures and key considerations Develop an evaluation process that best protects the credit union’s financial and other outcomes Register Now $295 Members | $395 Nonmembers(Additional $50 for USB)One registration gives your entire team access to the live webinar and on-demand recording until September 22, 2024.Go to the Online Training Center to access the webinar after purchase » Who Should Attend COOs CFOs NCCOs and compliance titles NCRMs and risk titles General counsel staff Education Credits NCCOs will receive 1.0 CEUs for participating in this webinar NCRMs will recieve 1.0 CEUs for participating in this webinar CPA credit information is below; recommended 1.0 CPE credits. CPA Certification Credit Information Reviewer: Josie Collins, Senior Associate Director of Education, NAFCU Learning Objectives: See key takeaways Program Level: Basic Prerequisites Needed: None Advance Preparation Needed: None Delivery Method: Group Internet-Based Recommended CPE Credits: 1.0 credits Recommended Field of Study: Regulatory Ethics – Technical About Our Webinars Our webinars are streamed live from NAFCU headquarters near Washington, DC. Your audio/video feed of the presenters includes presentation slides and downloadable handouts. You can easily submit your questions to the presenters at any time during the live broadcast, with no dialing over the phone! The audio and video stream directly through your computer. Web NAFCU firstname.lastname@example.org America/New_York public
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