Credit Weakens While Spending Diverges Sharply

dv01's latest series — U.S. Household Macro Monitor: Credit, Wealth & Spending Trends— is now available for download.

This month's report combines insights from the Federal Reserve’s Distributional Financial Accounts (DFA) and Affinity Solutions consumer spending data. Together, these datasets offer one of the most comprehensive views of U.S. household balance sheets and real-time spending behavior.

Quick Insights

Household Credit Growth Slows Sharply

• Total household credit growth fell to its lowest inflation-adjusted level since 2015, despite elevated prices and rising wages.
• Younger households (18–29) posted another quarter of negative YoY credit growth — the sixth in a row.
• Older households (60–70+) now account for the majority of credit expansion, with student and credit card balances rising fastest in these groups.

Credit Card Growth Decelerates as Account Openings Rise

• Credit card balances grew just 2% QoQ, the slowest Q3 reading since 2019.
• For the first time in a decade, account growth exceeded balance growth, signaling consumers are using newly opened accounts more sparingly.

Spending Trends Show Extreme Regional Divergence

• U.S. card-linked spending is up 26% since 2020, but just 4% in California and 8% across Western states.
• High housing costs and BNPL usage likely depress traditional card-linked spending in these areas.
• New England and the NY Tri-State region show above-average spending growth, despite similar affordability challenges.