Call it the trillion-dollar question, focused on the U.S. consumer: How much longer can spending keep outpacing the economic headlines?
The latest Federal Reserve consumer credit data offers a partial answer: A bit longer.
According to the Fed’s April G.19 report on Friday (June 5th), total consumer credit expanded at a 4.8% annualized rate, led by a sharp acceleration in revolving credit. Revolving balances, which include credit card debt, grew at a 10.4% annualized pace, up from 9.4% in March and marking the strongest increase since November 2023. Meanwhile, nonrevolving credit growth slowed to 2.9%.
Auto loans, student loans and other forms of installment borrowing are growing modestly. Credit card borrowing is growing much faster. That suggests consumers are placing a premium on flexibility as they navigate an environment characterized by elevated prices, economic uncertainty and borrowing costs that remain historically high.
That trend is pushing revolving balances toward historic levels. Total revolving credit outstanding reached $1.348 trillion in April, approaching the $1.352 trillion peak recorded in October 2024.
Credit as a Liquidity Tool
The Fed data suggests, and reinforces PYMNTS Intelligence findings, that credit is increasingly functioning as a liquidity management tool rather than simply a source of emergency borrowing.
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Consumers continue to face competing financial pressures. Housing costs remain elevated. Insurance costs continue to rise. Many households are still adjusting to the cumulative impact of several years of inflation. At the same time, consumer spending has remained surprisingly resilient.
PYMNTS Intelligence data points to a broader shift in how consumers think about borrowing. While buy now, pay later providers initially positioned themselves as alternatives to traditional credit cards, consumers increasingly appear to be using a wider range of credit products as tools for managing monthly cash flow. Credit card installment-plan usage rose from 23% in April 2025 to 36% in March 2026, more than double BNPL usage during the same period. Younger consumers were among the most active users of these options.
The Second-Half Test
The key question for the remainder of 2026 is whether rising revolving balances reflect confidence or strain.
One interpretation is optimistic. Consumers remain employed, wages continue to grow and households are using available credit because they remain comfortable with their ability to repay it. Under that scenario, rising balances are a sign of economic resilience and continued spending power. The less optimistic interpretation is that households are increasingly relying on credit to maintain spending levels that income growth alone can no longer support.
For now, the April report offers a reminder that predictions of a consumer pullback have once again proven premature. Spending remains intact.
At the moment there’s still momentum in the cards, digital and plastic.
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