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Written by Cyndie Martini
on June 16, 2021

During 2020, consumers paid down large amounts of credit card (i.e., revolving credit) debt. That's no secret. However, April data shows a decrease in revolving credit usage. This is after the large jumps in February and March. Total consumer credit rose by $18.6 billion in April, down from $25.8 billion in March (revised to $18.6 billion). April's expectations were for $20.5 billion. A fairly large miss.

April's total revolving credit stood at $964 billion, a decline of $1.96 billion from the previous month. That's also far below the December 2019 high of $1.094 trillion.

The action seemed to be over in non-revolving credit (auto and student loans). Non-revolving credit saw an increase of $20.6 billion to a new all time high of $3.274 trillion. This makes sense for (government) student loans, given they have been in forbearance since the spring of 2020.

Student loans rose by $25.2 billion in Q1 of 2021, hitting an all time high of $1.73 trillion. Auto loans rose by $11.9 billion to $1.236 trillion.

April, however, isn't setting the trend for revolving credit. It may be more of an outlier. After heavy credit card spending up to April, then a slow down, consumers are once again back on track for increased credit card spending. The April lull may be related to the flow of stimulus checks, unemployment benefits, or consumer's outlook about the future. 

Emergency unemployment benefits will continue for many states through September when they'll finally run out. This could coincide with another decrease in revolving credit card spending.

Delinquency rates on credit card loans continue to decline, as reported by all commercial banks. In Q1 2021, the rate dropped to a low of 1.89, beating out the Q3 2020 low of 2.00. The rate peaked in Q1 2020 at 2.70.

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