Revolving credit balances—consisting mostly of credit card debt—climbed $19.8 billion from October to $1.04 trillion, an annualized growth rate of 23.4%—the biggest jump for at least the last two decades of data recorded, the Federal Reserve reported Friday. Balances still aren’t back to the $1.1 trillion seen in February 2020, just before COVID-19 shutdowns put a brake on spending, but the sharp uptick gets them closer. Early in the pandemic, people had few places to go out and spend money and at the same time, government stimulus provided people with money that many used to pay down debt. But then people started moving about more freely and stimulus programs started to expire. November’s increase likely was due partly to improving confidence in the economy after the delta variant of the coronavirus fueled a spike in cases in late summer, said Shandor Whitcher, an economist at Moody’s Analytics. Cases have surged again since the omicron variant emerged in late November. “Growth may slow in the subsequent months as consumers tighten their belts during the Omicron wave,” Whitcher wrote in a commentary. Total outstanding consumer credit, which includes both revolving and nonrevolving credit like auto and student loans, increased by $39.9 billion in November from October, an annualized rate of 11%. The rise was more than double economists’ expectations for a $19.5 billion gain, according to Moody’s Analytics. Nonrevolving credit rose $20.1 billion, an annual rate of 7.2%. Have a question, comment, or story to share? You can reach Medora at medoralee@thebalance.com.
