According to the Federal Reserve's G.19 Consumer Credit Report, total U.S. consumer debt was $5.1 trillion in the third quarter of 2024, growing at an annual rate of 3.28% (seasonally adjusted). In general, consumer debt has slowed over the past two years, peaking in the second quarter of 2022 with interest rates as high as 9.16%. However, in the third quarter of 2024, growth accelerated from the previous quarter's interest rate of 1.14%.
The G.19 report excludes mortgages, so the data primarily reflects consumer debt in the form of student loans, auto loans, and credit card debt. As personal consumption exceeds personal income, savings rates have declined and consumer debt has increased. Previously, consumer debt growth had slowed as high inflation and rising interest rates caused people to borrow less. However, growth has picked up in the most recent quarter, likely reflecting expectations for a rate cut at the end of the quarter.
non-revolving debt
Non-revolving debt, primarily driven by student loans and auto loans, reached $3.75 trillion (SAAR) in Q3 2024, increasing at a seasonally adjusted annual rate (SAAR) of 3.46%. This growth rate is significantly higher than the previous six quarters, which were all less than 2.5%.
Student loan debt outstanding in the third quarter of 2024 was $1.77 trillion (NSA). Year over year, student loan debt increased by 2.41%, the largest annual increase since Q3 2021. This change is partially due to the COVID-19 emergency relief package for interest-free payment suspension for student loans that ended on September 1, 2023.
Meanwhile, auto loans totaled $1.57 trillion, an increase of just 0.96% year over year, the slowest growth rate since 2010. This slowdown can be attributed to multiple factors, including stricter lending standards, higher loan rates, and overall inflation. Auto loan interest rates in Q3 2024 reached 8.40% (for new cars at 60 months), the highest interest rate since the data series began. Although the Fed has begun lowering interest rates, auto loan rates tend to react slowly and are not directly affected by the rate cuts.
revolving debt
Revolving debt, primarily credit card debt, reached $1.36 trillion (SA) in the third quarter, growing at an annualized rate of 2.79%. This was slightly up from 2.58% in Q2, but markedly down from the peak growth rate of 17.58% in Q1 2022. The surge in credit card balances in early 2022 was also accompanied by an increase in credit card interest rates. This was an unusual jump, as there had been no year in the past 20 years in which interest rates rose by more than 2 percentage points.
By comparison, credit card interest rates have increased by 0.17 percentage points so far in 2024. In the third quarter of 2024, the average credit card interest rate held by commercial banks (NSA) reached a historic high of 21.76% (since data was recorded), up from 21.51% in the previous quarter. did.
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