U.S. Credit Growth Slows as Credit Card Balances Plummet in August
AInvestMonday, Oct 7, 2024 4:00 pm ET
1min read

The growth of U.S. consumer credit in August slowed significantly compared to the previous month, largely due to the most substantial drop in credit card balances since March 2021.

According to recent data released by the Federal Reserve, consumer credit increased by $8.9 billion in August, falling short of economists' median forecast of $12 billion. This follows a revisited surge of $26.6 billion in July, marking the largest rise since October 2022. It's important to note that these figures are not adjusted for inflation.

Revolving credit, which includes credit cards, saw a decrease of nearly $1.4 billion. In contrast, non-revolving credit, encompassing auto and student loans, expanded by $10.3 billion.

The decline in revolving credit highlights consumers' efforts to reduce high-interest credit card debt. Despite the Federal Reserve's recent decision to initiate a loosening cycle by cutting the benchmark rate by 50 basis points in September, the impact on consumer borrowing costs will take time to materialize.

Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.