Consumer Borrowing Unexpectedly Plunged In December

By
Diccon Hyatt
Diccon Hyatt
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Diccon Hyatt is an experienced financial and economics reporter who has covered the pandemic-era economy in hundreds of stories over the past two years. He's written hundreds of stories breaking down complex financial topics in plainspoken language, emphasizing the impact that economic currents would have on individuals' finances and the market. He's also worked at The Balance, U.S. 1, Community News Service and the Middletown Transcript.
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Published February 07, 2023
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Consumers are finally giving their credit cards a break. 

A combined measure of how much consumer debt increased for credit cards and other consumer loans (but not mortgages) fell to $11.6 billion in December from $33.1 billion in November, the Federal Reserve reported Tuesday. The drop-off was far greater than the decline to $26 billion that economists had predicted. A chart shows just how steep the fall was.

Borrowing for revolving debt like credit cards fell by more than half to $7.2 billion from $15.2 billion, while nonrevolving debt for things such as student loans and car loans plummeted to $4.4 billion from $17.8 billion. The sharp cutback in new debt matches a rapid decline in consumer spending in the final month of 2022. 

“Growth slowed considerably from the month prior, reflecting a weaker-than-normal holiday shopping season and weakening supply of credit,” Shandor Whitcher, an economist at Moody’s Analytics, wrote in a commentary.

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  1. U.S. Federal Reserve System. “Consumer Credit - G.19.”