Consumer credit is borrowing by individuals for personal use — buying a car, financing education, paying for home renovations, or using a credit card for everyday purchases. It does not include business loans or mortgages (though some definitions include the latter).
Consumer credit comes in two flavors: installment credit (fixed payments over a set period, like car loans or student loans) and revolving credit (flexible borrowing up to a limit, like credit cards). Americans carry over $5 trillion in total consumer debt.
Consumer credit fuels economic growth — when people borrow and spend, businesses sell more, hire more, and grow. But too much consumer debt creates risk. Central banks monitor consumer credit growth closely. The Federal Reserve publishes a monthly G.19 Consumer Credit report tracking outstanding balances.