Consumer Credit Trounces Estimates On Unexpected Surge In Credit Card Usage

One month after we reported that US consumers appeared tapped out following the first consecutive 2-month stretch of declines in credit card balances, moments ago the Fed published the latest monthly consumer credit data and once again it was a bit of a brainteaser. That's because after several months of weak credit creation, July saw the second highest monthly increase of 2025 with a total of $16.0 billion in credit, up almost double from the revised June print of $9.6 billion (vs the unrevised number of $7.4 billion), and well above the $10.2 billion median estimate.

Boring, as usual, growth in non-revolving credit (which is basically auto and student loans) eased back and after 3 consecutive prints at or just shy of $10 billion, the July increase of $5.534 billion was the smallest since February, bringing the total to a new record high of $3.749 trillion.

While we won't have a detailed breakdown between the two components until the end of Q3, we remind readers that the increase that in Q2 was driven in roughly equal contributions from student loans (+8.1BN) and auto loans (+$6.1).

As usual, the surprise was in the big jump, and sudden reversal in the recent slowdown in credit card debt, which in July surged by $10.5 billion from the upward revised $807 million June (a number which previously was negative).

And just like that the acute slowdown - if not outright decline - in credit card debt which we saw starting in February 2025 and which led to a sizable decline in May (and before the revision, in June), is now over thanks to the biggest monthly increase in credit card debt of 2025, which pushes the total to the highest level since Nov 2024 when we saw a major drop off in credit card balances.