Consumer credit conditions softened in Q3 2022 as the Federal Reserve continued raising interest rates.
Real monthly purchase volumes (seasonally adjusted) fell across tiers in Q3 compared to the previous quarter, consistent with broader consumer spending trends during this period. Purchase volume increased on a year-over-year basis for prime and super prime groups.
Credit card credit outstanding as a share of disposable income increased as credit card debit rose faster than disposable income. However, the measure remains 43 bps below its pre-pandemic level.
The share of Revolvers rose in Q3, putting upward pressure on the effective finance charge yield. Coupled with the Federal Reserve's rapid rate hikes (150 bps in Q3 alone), the rising share of Revolvers led to an increase in the effective finance charge yield.
