Average credit card debt per person peaked in Q4 2019 at $3,700, according to data from the Federal Reserve Bank of New York, Federal Reserve Board. Since then, it has been rising back to those levels. As of Q2 2022, it stood at $3,540. Let's look at some of the latest trends in increasing credit debt.
Aggregated Bank of America credit and debit card spending is up 11% year-over-year as of June 2022. The bank reports that consumer balance sheets are strong, despite weak consumer sentiment. Aggregate spending, year-over-year in the 28 days prior to June 30, is slowing. However, it is up year-over-year by 3.3%. BoA says the slowdown may be due to waning spending from pent-up vacation demand.
Average gasoline spending as a share of total card spending was up 9.8% in June. As of August 31, the Bureau of Economic Analysis data showed that gasoline card spending peaked on July 1 and has since declined to levels seen at the beginning of this year.
“Consumers are in better shape to respond to a slowdown in the U.S. economy than they have been in many previous business cycles,” said David Tinsley, senior economist for the Bank of America Institute. “But with some slowdown in services spending, we may need to wait until the summer is over to get a clearer picture of the strength of the underlying consumer momentum.”
Additionally, inflation has contributed to increased spending heading into the summer. Inflation appears to be peaking, which could impact a peak in spending growth. Within the next few months, this correlation will become more clear.
Some other trends in credit card spending — according to a recent Forbes article, Visa is the leader in card use, making up 52.8% of cards in circulation. A 2021 Federal Reserve Bank of San Francisco study found that credit cards made up 28% of all payments. Additionally, the number of credit card users hit a new high in Q4 2021 at 196 million, according to TransUnion.
Let Us Know What You Thought about this Post.
Put your Comment Below.