Lower Credit Card Debt Doesn't Curb Credit Growth

The Federal Reserve report in consumer credit is one that never really moves markets. It has a long look back as this is now a January report. Still, the Federal Reserve has reported that consumer credit increased at a seasonally adjusted annual rate of 3.6% in January.

The Fed also reported that revolving credit decreased at an annual rate of 1.25% and non-revolving credit increased at 5.4% on an annualized rate.

It is important to distinguish between the different credit types. Revolving credit is credit cards. Non-revolving credit covers things like cars, mobile homes, educational or student loans, boats, trailers or vacations.

On a specific dollar amount, the numbers are rather large. The total outstanding credit was 3.5436 trillion in January. That was $935.3 billion in credit card debt and $2.6083 trillion in non-revolving credit outstanding.

As far as how the 3.6% annualized growth rate compares to years past, that can be seen here as the annual total percentage changes:

  • 7.0% in 2015
  • 7.0% in 2014
  • 6.0% in 2013
  • 6.1% in 2012
  • 4.1% in 2011

This 3.6% may sound lower because of the revolving credit drop in credit cards. If you think about it logically, that may just be consumers paying down their credit card debt after the holidays.

The total student loan debt was last seen at $1.3204 trillion, but that was as of December. Student loan debt outstanding was listed as $1,236 trillion in 2014, $1.1465 trillion in 2013 and $1.0552 trillion in 2012. That figure was last under $1 trillion on an annual basis in 2011, when the student debt total at year-end was $947.9 billion.

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