December Credit Surge Signals Rising Reliance on Cards

Consumer use of credit cards and other forms of credit increased in 2025. Consumer credit was up 2.4% with revolving credit, which is mainly credit cards, increasing 3.4%, according to the Federal Reserve. Nonrevolving credit, which includes student loans, auto loans, and personal loans, was up by 2.0%. 

That means consumers were turning to credit to pay for more of their purchases in the past year. And consumers made many of those purchases toward the end of the year. In the fourth quarter of 2025, consumer credit increased at a seasonally adjusted annual rate of 3.0%. 

December, in particular, was a busy month for consumer credit use. In December 2025, consumer credit increased at a seasonally adjusted annual rate of 5.7%. So many Americans may have used credit cards to pay for holiday shopping and other end-of-year expenses in December. 

This 5.7% increase was up from a 1.1% increase in November and a 2.2% increase in October — revealing a definite leap in spending in consumer credit in the last month of 2025.

Taken together with debit card spending, credit card spending actually decreased 1.3% year over year in November, according to Bank of America aggregated card data. 

Higher-income households were spending more with their debit and credit cards, increasing their spending by 2.6% year over year. Lower-income households made an increase of just 0.6% year over year on their credit card and debit card spending, according to Bank of America.

At the same time, higher-income households saw a 4% year-over-year increase in after-tax wages compared with a 1.4% after-tax wage increase year over year among lower-income households.

But it may not only be your income that determines your credit card spending. Many Americans say they are carrying credit card debt because of everyday expenses, according to a study by Academy Bank, a regional bank headquartered in Kansas City, Missouri.

According to the study, an incredible 73% of $1.21 trillion in credit card debt was used to pay for everyday expenses.

Here’s how that 73% gets broken down. When asked to identify the primary causes of credit card debt, 28% of those surveyed said day-to-day expenses, 16% said unexpected expenses, 11% said car repairs, 10% said medical bills, and 8% said home repair bills.

Just how much credit card debt are consumers carrying? The average American carries $5,595 in credit card debt, according to the study. So those everyday expenses when charged on a credit card can pile up to a few thousand dollars in card debt especially on cards with high interest rates.

According to Forbes Advisor, the average credit card interest rate is 25.27%.  

“With credit card debt at record levels, understanding the realities of high-interest debt has never been more important,” said Nick Alphs, President of Residential Lending at Academy Bank. 

“This white paper sheds light on the pressures facing American households and highlights tools — like responsibly using cash-out refinances — that save borrowers substantial money and help them more quickly reduce high-interest balances.”

What does this mean for lenders? Those with high-interest rates on credit card debt may be good candidates for personal loans.

Consumer credit grew in 2025 with consumer credit increasing 2.4% in 2025 and revolving credit up 3.4% for the year, according to the Federal Reserve.

In December, consumer credit popped up at a seasonally adjusted annual rate of 5.7%. According to a study from Academy Bank, 73% of credit card debt was because of everyday expenses.