The Federal Reserve reported mixed consumer borrowing trends in May 2026, with revolving credit falling sharply even as nonrevolving credit posted gains. In its monthly Consumer Credit report released July 8, the Fed said revolving credit—largely credit card debt—decreased at an annual rate of 4.7 percent, marking the first decline since 2024.
Total consumer credit was unchanged on a seasonally adjusted basis in May, according to the Fed’s G.19 report. The flat reading masked divergent trends: while revolving credit contracted, nonrevolving credit, which includes auto loans and other installment borrowing, increased at an annual rate of 1.6 percent.
The overall result fell well short of economist expectations. A Bloomberg survey of analysts had predicted a $17.5 billion advance in total consumer credit, but instead total credit outstanding decreased by about $182 million in May. The decline was unexpected, underscoring a pullback in consumer willingness to take on credit card debt despite a resilient labor market.
Credit card interest rates remained elevated at 20.94 percent for all accounts in May, unchanged from April. For accounts assessed interest, the rate stood at 22.15 percent. These high rates have likely contributed to consumer caution on revolving debt, as households face steeper costs to carry balances month to month.
The shift toward nonrevolving credit suggests consumers are still borrowing, but in different ways. Auto loans and other installment loans, which typically carry lower rates and fixed repayment schedules, continued to grow. This pattern reflects how consumers are adapting their borrowing behavior to an environment of elevated interest rates, favoring longer-term structured loans over shorter-term revolving credit.
Sources
- Federal Reserve Board — May 2026 Consumer Credit G.19 report, released July 8, 2026, showing revolving credit declined 4.7% annually, nonrevolving credit increased 1.6% annually, and credit card rates
- Bloomberg — July 8, 2026 reporting that total consumer credit declined by $182 million in May, missing economist forecast of $17.5 billion advance, and noting first decline since 2024
