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Consumer credit card debt rose again in April 2022, according to the latest consumer credit report from the US Federal Reserve. Revolving credit card debt fell from $1,023.6 billion in March 2022 to $1,040.7 billion in April. It has steadily increased since the first quarter of 2021, when it fell to $911.1 billion, according to the report.
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One-time loans, including car and school loans, also increased. Overall borrowing rose 10.1% in April at an annualized rate. Total credit rose $38.1 billion from March, according to Fed figures.
Despite inflation, consumers continue to buy. And, as the report indicates, they buy on credit. Some of the credit card usage is an indication of the growth of digital payment options and online shopping. The report does not show whether the debt is repaid at the end of the month or not.
However, according to Bloomberg, savings rates have fallen to their lowest levels since 2008, which could indicate that Americans are using their credit cards to fend for themselves and buy 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.
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Increases in minimum wage and rising employee wages, coupled with FOMO (fear of missing out) on life experiences and travel, as well as post-pandemic “revenge spending” also likely contributed to the downturn. increase in credit card spending in 2022. Personal spending increased by 0.9% between March and April. Even adjusted for inflation, spending has increased, according to Bloomberg.