U.S. consumer credit growth slowed to a seasonally adjusted annual rate of 1.9% in August 2026, down from a revised 4.1% in July, as revolving credit contracted while nonrevolving borrowing continued to expand, according to the Federal Reserve’s October 7 Consumer Credit (G.19) report.
The report, released at 3:00 p.m. Eastern Time, showed that outstanding consumer credit continued increasing, but at less than half July’s annualized pace. The distinction matters because the slowdown was concentrated in revolving credit, which includes credit card balances, rather than across every major category of household borrowing.
Revolving credit falls as installment borrowing grows
The sharpest change occurred in revolving credit, which declined at a 4.2% annual rate in August after increasing 2.5% in July. Nonrevolving credit, including automobile, education and other installment loans, grew at a 4.1% annual rate, compared with 4.7% in July.
The Federal Reserve’s seasonally adjusted credit tables show the divergence clearly.
| Credit Category | July 2026 | August 2026 |
|---|---|---|
| Total consumer credit | +4.1% | +1.9% |
| Revolving credit | +2.5% | −4.2% |
| Nonrevolving credit | +4.7% | +4.1% |
Seasonally adjusted annualized growth rates. July revised; August preliminary.
The largest swing was therefore in revolving borrowing, which shifted by 6.7 percentage points between July and August. Nonrevolving credit slowed only 0.6 percentage point, indicating that installment borrowing remained comparatively resilient even as revolving balances contracted.
Credit growth slows by more than $9 billion on a monthly basis
The Fed reported an annualized increase of $99.4 billion in total consumer credit during August, compared with a revised $212.9 billion in July. These figures are annualized flows, not amounts borrowed during a single month.
Using the Federal Reserve’s published flows divided by 12, Investozora calculates that consumer credit increased by approximately $8.3 billion in August, compared with $17.7 billion in July. That represents roughly $9.5 billion less additional credit than in the preceding month, using rounded official figures.
The underlying components reveal why. Revolving credit fell by approximately $4.8 billion during August, while nonrevolving credit increased by about $13.1 billion, on the same calculated monthly basis. The installment-credit expansion more than offset the revolving-credit decline, leaving total outstanding consumer credit higher.
Seasonally adjusted consumer credit outstanding reached approximately $5.197 trillion in August, compared with $5.189 trillion in July. The Fed’s G.19 methodology excludes real-estate-secured borrowing, including mortgages, and adjusts reported growth rates for statistical breaks in the underlying series.
July figures revised lower
The August release also revised earlier estimates, reinforcing the importance of distinguishing newly reported figures from previously published readings.
July’s total consumer credit growth was revised from 4.2% to 4.1%, while its annualized credit flow was reduced from $216.7 billion to $212.9 billion. July’s nonrevolving growth rate was adjusted from 4.8% to 4.7%. June’s total credit growth, meanwhile, was revised upward from 3.4% to 3.6%.
These changes are visible when comparing the September 8 G.19 release with the October 7 report. They show that revisions affected the comparison base, although the central finding of slower August credit growth remains unchanged.
Credit card borrowing remains expensive
The contraction in revolving credit occurred alongside elevated borrowing costs. The Fed reported an average credit card annual percentage rate of 22.36% for accounts assessed interest in August, compared with 22.15% in the second quarter. The average rate across all credit card accounts was 21.19%.
These figures come from the G.19 report’s separate, not seasonally adjusted terms-of-credit table. They measure borrowing rates rather than growth in credit outstanding.
The combination of declining revolving balances and elevated interest rates is relevant to households carrying credit card debt. However, the data cannot establish whether the August decline reflected weaker spending, larger repayments, tighter lending conditions, or other factors.
For additional context, Investozora has examined how Federal Reserve policy affects credit card interest rates and the broader relationship between higher interest rates and consumer borrowing costs.
What comes next for consumer borrowing?
The August report provides a narrower signal about household borrowing than the headline growth rate alone suggests. Revolving credit contracted, nonrevolving credit continued expanding, and overall balances reached a higher level despite slower growth.
These developments do not independently establish a deterioration in household finances or determine the Federal Reserve’s next interest rate decision. Consumer credit data must be considered alongside spending, incomes, employment, inflation and lending conditions.
The next scheduled G.19 report, covering September consumer credit, is due November 6, 2026, at 3:00 p.m. Eastern Time, according to the Fed’s official statistical release calendar.
That release will help establish whether August’s revolving-credit contraction was temporary or the beginning of a more sustained change in consumer borrowing.
