Use of credit expanded in October

December 5, 2025

Consumers took on more debt at the beginning of the fourth quarter. Total consumer credit outstanding rose 2.2% at a seasonally adjusted annual rate in October, short of the downwardly revised 2.6% gain for September.

Revolving debt, comprised primarily of credit cards, increased 4.9%. The September data were revised up to a 4% gain from 1.5%; August data were also revised up. That suggests consumers continued to spend in October, despite disruptions from the government shutdown. Those who had to go without pay during the month likely used their credit cards to make ends meet. Federal workers will get paid, but government contractors and some workers in their communities will not.

The Chicago Federal Reserve Bank's Advance Retail Trade Summary (CARTS) predicts that retail & food services sales, excluding autos, rose 0.4% in October. That is a touch above the +0.3% increase in September.

The total of nonrevolving debt, which includes car loans, student loans and personal loans, edged higher at an annual rate of 1.2% in October. Both the September and August data were revised lower.

Weak vehicle demand is likely capping the number of auto loans. The average vehicle price crossed the psychological threshold of $50,000, while interest rates on loans remain near record highs. The federal tax credit for electric vehicles expired at the end of September.

Student debt continues to accumulate and compound. A report by the Urban Institute found that six million Americans are at least 60 days delinquent on student loan payments, a return to the pre-pandemic level.

Mississippi, Louisiana and Georgia have the highest delinquency rates. The New York Federal Reserve Bank's household debt and credit report in the third quarter registered a record high transition rate into serious student loan delinquency.