Americans Always Pay Down Credit Cards In Q1. But Not This Year…

Typically, Americans’ credit card balances decline during the first quarter of a calendar year. Not in 2023, though.

Card balances were flat at $986 billion in the first quarter, the New York Fed said Monday, in the latest installment of the bank’s quarterly household debt report.

It was the first Q1 in the (relatively short) history of the NY Fed’s data series during which the nation’s credit card balance didn’t decrease.

Recall that Q4’s $61 billion increase was the largest on record. You can make of that what you will, but a simplistic takeaway is that Americans simply didn’t pay off balances incurred during the holiday shopping season this year. Retail sales, you might recall, were very robust in January.

Auto loan balances rose $10 billion in Q1, and “other” balances, including retail cards and consumer loans, increased $5 billion.

Americans were the proud owners of a record 573 million credit card accounts at the end of the quarter. There’s some double counting going on, but taken at face value, the figure represents more than one credit card account for every man, woman and child in the country.

For reference, Americans had just 378 million accounts in Q3 of 2010, when the post-financial crisis de-leveraging troughed.

Mortgage originations fell a seventh consecutive quarter. At $324 billion, Q1’s total was the lowest in nearly nine years.

Specifically, last quarter’s sum was the lowest since Q2 2014, which the New York Fed fondly remembered as “a quarter that was unusually low due to the taper tantrum.”

I suppose I’m pointing out the obvious, but the decline from the pandemic bonanza pace is remarkable.

Total mortgage balances rose by $121 billion during the quarter to exceed $12 trillion at the end of March.

Notably: HELOC balances rose a fourth consecutive quarter. Prior to Q4 2021, those balances had only posted two quarterly gains since 2009.

Overall, US household debt rose $148 billion in Q1 to $17.05 trillion. Or about 10 entire Russian economies.


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