United States Consumer Credit Dips in April
Total consumer credit owned and securitized was growing at an annual rate of 1.9% in April, that was the weakest rate since March of 2021 and a bit lower than the average in the decade between the Great Recession and Pandemic.
On a monthly basis, lending is growing by less than 0.1%, and it was flat in March. On an average month in the decade prior to the pandemic, growth rates were in the 0.4% to 0.6% per month range. What to make of it? There is a little bit of noise in the data due to inflation. Inflation on key items used heavily in credit card purchases (like gasoline and fuel) fell in the past month, and that would have eased some of the credit card use pressure.
Retail was flat after adjusted for inflation (it was down slightly). So, the bottom line is that higher-income earning households are paying down their debt more aggressively (adding less overall) while those in lower-income households are using more (which is why 
delinquency rates on credit card debt is accelerating and nearing 2009 levels). Conditions are very complex. – Keith Prather, Armada Corporate Intelligence
United Kingdom Consumer credit borrowing halved in April 2024
Latest Bank of England Money and Credit data has shown that net consumer credit borrowing halved in April 2024, falling from £1.4 billion in March to £0.7 billion. This marks its lowest level since December 2021, at the beginning of the cost of living crisis as consumer confidence dropped.
The decline was driven by lower net borrowing through credit cards, which fell from £0.7 billion to £0.2 billion in April, and lower net borrowing through other forms of consumer credit (such as car dealership finance and personal loans), which fell from £0.8 billion to £0.5 billion over the same period.
The annual growth rate for all consumer credit decreased from 8.7% to 8.1% in April. The annual growth rate for credit cards fell from 11.9% to 10.8% in April. Other forms of consumer credit also decreased, from 7.3% to 6.9% over the same period.
Richard Pinch, Partner at Vestigo Partners said “Amid fluctuating economic conditions, the prodigious drop in consumer credit borrowing in April is a concerning indicator of financial jitters among households.
“Total net borrowing more than halved through the month and net borrowing on credit cards also dropped sharply in a sign of financial prudence after a strong start to the year. Market expectations on rates now suggest we are entering a period where the cost of borrowing will remain at elevated levels for a longer period representing a new normal for those taking our loans whether than is on credit cards, via personal loans or through products like car finance.”
Paul Heywood, Chief Data & Analytics Officer at Equifax said “The latest Bank of England figures paint a mixed picture with mortgage lending up, but consumer credit borrowing and mortgage approvals both decreasing in April.
“While not reflected in today’s figures, UK inflation has now fallen to its lowest level in almost three years, adding more impetus to a potential base rate cut that could fuel mortgage demand. The stabilising macro situation means more consumers should start to find bills and credit repayments more affordable, but this doesn’t tell the whole story. Prices are still rising, and we’ve already seen consistent growth in the numbers of credit cards with high levels of utilisation, as the cost of living continues to impact affordability.”
