Amid soaring prices, consumers reached for their credit cards in April, which lifted revolving credit above its pre-pandemic peak for the first time. While this is good in the sense that it points to strong demand despite high prices, it could be bad if it puts households behind the 8-ball in terms of staying current on their debt. A low debt service ratio says that is not yet the case.
Put it on the Card
The latest numbers on consumer credit from the Federal Reserve point to a major milestone: revolving credit (mostly credit card debt) has crested above its pre-pandemic peak for the first time. For total consumer credit the $38.1 billion gain in April marks a near-record increase, second only to that seen a month earlier in March. The data make clear that consumers are increasingly relying on debt to fund purchases. READ FULL ARTICLE>>