Households added more credit in July across cards and long-term loans, extending the financial obligations that will compete with other spending in the months ahead.
Consumer credit grew at a seasonally adjusted annual rate of 4.2% in July, according to the Federal Reserve’s latest G.19 report, released Tuesday (Sept. 8). The increase followed a revised 3.4% rise in June. Nonrevolving credit, including auto and student loans, advanced 4.8%, its strongest reading in more than a year. Revolving credit, which includes credit cards, increased 2.5%.
The dollar figures sharpen the contrast. Total seasonally adjusted consumer credit increased by about $18.1 billion during July. Roughly $15.3 billion of that came from nonrevolving credit, compared with approximately $2.8 billion from revolving credit.
Yet revolving balances reached $1.357 trillion, edging above the previous high of $1.352 trillion recorded in October 2024. Total consumer credit reached $5.186 trillion, including $3.829 trillion of nonrevolving debt.
Credit expanded in both categories, with the larger increase occurring in loans that generally produce scheduled payments extending beyond the month in which the obligation is incurred.
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For the spending outlook, different forms of consumer credit have different relationships with household cash flow. A rising card balance can reflect current purchases that aren’t being paid off in full. Auto credit can permit a household to make a large purchase while converting its cost into monthly payments.
Credit Use Is Broader Than the Fed’s Card Balance Tally
PYMNTS research provides some evidence of how those choices appear at the point of sale.
The PYMNTS Intelligence report “More Ways to Pay: The Data Behind Millennials’ Expanding Payment Toolkit” found in July that 70% of millennials used debit cards and 66% used credit cards for retail purchases during the prior 12 months. In stores, however, debit accounted for 43% to 47% of transactions, compared with 25% to 27% for credit cards.
July’s figures also look somewhat stronger after revisions to the preceding months. May, originally reported as a 0.3% decline in consumer credit, is now recorded as a 0.5% increase. June was revised to 3.4% growth from 3.3%.
The G.19 data doesn’t show whether consumers are borrowing because their finances are under pressure, because they are confident enough to make larger purchases, or simply because financing is available. It also can’t establish how much incremental borrowing translates into incremental consumption.
The next test comes from what happens to those balances as the calendar moves toward the year’s heaviest spending period. July left consumers entering the second half of 2026 with more revolving credit outstanding and a faster pace of growth in long-term borrowing. The Fed’s next reports will show whether that was a summer increase or the beginning of a more persistent run-up in household credit.
Continued growth in credit alongside firm spending would indicate that households are still willing to take on additional obligations while making purchases. A weakening in spending while balances continue to climb would present a different picture, with more income already spoken for by earlier borrowing. Neither outcome is visible in July’s G.19 alone. But after upward revisions erased May’s reported contraction, the burden of evidence has changed. There is little in the Fed’s latest credit data to suggest consumers entered the second half of the year retrenching from borrowing.
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