WASHINGTON (9/9/15)--Consumer credit issued by credit unions rose by $4.5 billion in July from June to $327.7 billion outstanding overall, according to the Federal Reserve.
While revolving credit, typically tied to credit card use, inched up roughly $300 million, nonrevolving credit, related to big purchases such as vehicles and education, rose $4.2 billion.
In June, consumer credit at credit unions jumped $7.4 billion.
“Consumer credit continues to improve at a steady pace,” said Christopher Velarides, Moody’s analyst (Economy.com Sept. 8). “Encouraging job gains and increasing house prices have encouraged consumers to splurge on big-ticket items. Extremely low interest rates and easier access to credit are enticing consumers to finance large purchases such as education and vehicles.”
For all major accountholders nationwide, consumer credit increased at a seasonally adjusted annual rate of 6.7% in July, posting a gain of $19.1 billion during the month.
Revolving credit climbed by 5.7% after a 10% jump the previous month, while nonrevolving credit increased by 7%, a slight deceleration from the 9.4% increase in June.
Nonrevolving debt has been the largest driver of consumer credit in recent years (MarketWatch Sept. 8).
“Meanwhile, revolving balances have picked back up as consumers remain wary of taking on higher-interest debt,” Velarides said. “It is encouraging that this segment contributed $4.3 billion to growth, but there is still a long way to go to recover from the sluggishness throughout the recovery.”