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Total consumer credit grew 2.5 percent in July at a seasonally-adjusted, annualized rate and is up 4.9 percent compared to a year ago. In addition, while revolving credit – primarily credit cards – rose 9.2 percent, it remains 10.2 percent higher than July 2022. Non-revolving credit – primarily auto and education loans – rose 0.2 percent in July and is up 3 percent from a year ago. NAFCU Vice President of Research and Chief Economist Curt Long broke down the data further in a new Macro Data Flash report.

“Consumer credit growth slowed in July, which continues a gradual deceleration trend over the past nine months,” said Long. “Student loans are a large part of the slowdown, and consumer credit owned at the federal level – most of which represents student loans – fell for the sixth consecutive month in July. Revolving credit growth remains high despite the modest drop. This is prompting fears that stresses may arise at the household level due to greater borrowing in a higher interest rate environment.”

Total consumer credit for credit unions grew 0.6 percent in July. Banks experienced zero percent growth, and finance companies saw a gain of 0.6 percent. From a year prior, total consumer credit at credit unions rose 10.5 percent, while banks experienced an 5.7 percent gain and financial companies grew 4.4 percent.

Over the past 12 months, credit unions’ share of the market rose 0.7 percent to 13.3 percent. Banks’ share rose 0.3 percent, and finance companies’ share remained at 14.4 percent.

“With the labor market as strong as it is, consumers have greater capacity to add debt, but lenders report tightening loan standards for consumer credit. NAFCU expects growth in consumer debt to continue to moderate due to cuts in credit supply,” Long concluded.

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