Revolving credit shot up 9.4% in July—don’t panic over one month of data

The news: Revolving credit increased at an annual rate of 9.4% in July, per data from the Federal Reserve. It totaled $1.359 trillion annualized, up from $1.348 trillion the previous month.

• Total consumer credit grew at a seasonally adjusted rate of 6%.
• Non-revolving credit increased 4.8%.

What this means: Consumers are borrowing more, and some are struggling to pay back their balances in full.

• Elevated interest rates are contributing to the consumer debt buildup by making it more expensive to pay off. In May 2024, the average credit card interest rate was 22.76%, according to Fed data.
• Inflation effects are also still lingering in consumers’ spending: 84% of consumers said inflation was a top financial concern in Q2, the highest level in two years, per a TransUnion survey.