Call it the trillion-dollar question, focused on the American consumer: How long will spending continue to outpace economic headlines?
The Federal Reserve’s latest consumer credit data offers a partial answer: a little longer.
According to the Fed G.19 report for April On Friday (June 5).yTotal consumer credit expanded at an annual rate of 4.8%, driven by a sharp acceleration in revolving credit. Revolving balances, which include credit card debt, grew at an annual pace of 10.4%, up from 9.4% in March, representing the strongest increase since November 2023. Meanwhile, non-revolving 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. This suggests that consumers are placing greater importance on flexibility as they navigate an environment characterized by rising prices, economic uncertainty and borrowing costs that remain historically high.
This trend is pushing revolving balances towards historical levels. Total revolving credit outstanding reached $1.348 trillion in April, approaching the peak of $1.352 trillion recorded in October 2024.
Credit as a liquidity instrument
Federal Reserve data suggest, and reinforce PYMNTS intelligence findings, that credit is increasingly serving 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 high. Insurance costs continue to rise. Many households are still adjusting to the cumulative effect 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 doubling BNPL usage over the same period. Younger consumers were among the most active users of these options.
Second half test
The key question for the remainder of 2026 is whether rising revolving balances reflect confidence or tension.
One explanation is optimistic. Consumers remain working, wages continue to grow, and households use available credit because they remain comfortable with their ability to repay it. Under this scenario, rising balances are a sign of economic resilience and continued purchasing power. A less optimistic explanation is that households increasingly rely on credit to maintain spending levels that income growth alone can no longer support.
For now, the April report offers a reminder that expectations of a consumer decline have once again proven to be premature. Spending remains healthy.
At the moment, there is still momentum in the field of digital and plastic cards.
