Consumer credit card debt rose once again in April 2022, according to the latest Consumer Credit Report released by the U.S. Federal Reserve. Revolving credit card debt rose from $1,023.6 billion in March 2022 to $1,040.7 billion in April. It has been steadily increasing since the first quarter of 2021, when it had dropped to $911.1 billion, the report showed.
Non-revolving credit, including car and school loans, also rose. In all, borrowing climbed 10.1% in April on an annualized basis. Total credit rose $38.1 billion from March, according to the Fed’s figures.
In spite of inflation, consumers continue buying. And, as the report indicated, they are buying on credit. Some of the credit card use is an indication of the growth of digital payment options and online shopping. The report doesn’t show whether debt is being paid off at the end of the month, or not.
However, according to Bloomberg, savings rates have dropped to their lowest levels since 2008, which could indicate Americans are using their credit cards to get by and purchasing essentials in the face of inflation. The New York Fed reported that 537 million new credit card accounts were opened in the first quarter of 2022.
Increases in minimum wage and rising employee salaries, coupled with FOMO (fear of missing out) on life experiences and travel, along with post-pandemic “revenge spending” have also likely contributed to increased credit card spending in 2022. Personal outlays rose 0.9% between March and April. Even when adjusted for inflation, spending increased, according to Bloomberg.
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