The Federal Reserve’s latest G.19 Consumer Credit Report shows rising trends in consumer credit, excluding loans secured by real estate, through November 2019.
In November, consumer credit increased at a seasonally adjusted annual rate of 3.6 percent from the previous month, with revolving debt1 decreasing by 2.7 percent and non-revolving debt2 increasing by 5.8 percent. Consumer credit totaled $4.2 trillion on a seasonally adjusted basis, with $1.1 trillion in revolving debt and $3.1 trillion in non-revolving debt. This is an increase of $12.5 billion from the previous month, with the increase in aggregate non-revolving debt partially offset by the decrease in the aggregate revolving debt.
The above figure shows year-over-year (YoY) growth rates in non-revolving debt. As of the end of November, non-revolving debt’s YoY growth rate was 5.0%, the lowest rate since last summer.
On an unadjusted basis, the consumer credit data indicate that among the various institutions at which non-real estate non-revolving debt was held, the growth in balances held at depository institutions (commercial banks) slowed. On the other hand, credit unions’ holdings of such debt decreased. The slowing in growth of non-real estate, non-revolving debt bodes well for prospective homeowners, as it means that their finances will be less constrained by student and auto-loans, which are non-revolving debt’s largest non-real estate components.
Revolving credit plans are largely composed of credit card debt but also include home equity lines of credit (HELOCs). These may be unsecured or secured by collateral and allow a consumer to borrow up to a prearranged limit and repay the debt in one or more installments. The G.19 Consumer Credit report excludes HELOCS and home equity loans, as they are secured by real estate.
Non-revolving credit is closed-end credit extended to consumers that is repaid on a prearranged repayment schedule and may be secured or unsecured.