Consumer Credit

Debt assumed by consumers to buy goods and services, excluding mortgages.

Consumer credit represents the total amount of outstanding debt that individuals incur to purchase goods and services, excluding loans secured by real estate, such as home mortgages. This metric is primarily divided into two categories: revolving credit, which includes credit cards and lines of credit that can be used repeatedly, and non-revolving credit, which consists of closed-end loans with fixed repayment schedules, such as auto loans, student loans, and personal loans. In the United States, consumer credit data is collected and published monthly by the Federal Reserve Board in its G.19 statistical release. Economists and market participants track these figures closely to gauge the borrowing habits of households. Because consumer spending drives a significant portion of gross domestic product (GDP), changes in credit expansion or contraction serve as a direct reflection of broader economic momentum. For investors, rising consumer credit is generally viewed as a positive sign of consumer confidence, indicating that households feel secure enough about their jobs and incomes to take on debt. However, if credit growth consistently outpaces wage growth, it can signal that consumers are overextending themselves to maintain their lifestyle. This overextension can lead to rising delinquency rates, eventually hurting the earnings of financial institutions and consumer discretionary companies.

If a country's total outstanding credit card debt is $1.2 trillion and outstanding auto and student loans total $3.6 trillion, the total consumer credit is calculated as $1.2 trillion + $3.6 trillion = $4.8 trillion. Mortgages are excluded from this calculation.