Fed: Revolving Credit Fell in August as Card Rates Stayed Near 21%

Why this matters: Mortgage lenders count card, car and student loan payments in your debt-to-income ratio. National data cannot tell you your own ratio, but it shows that card balances fell in August while card rates stayed high.

Cover: a payment card and a car loan document beside a bar chart. Illustration created for mortgage.news; it does not depict a real person, property or document.

What the Fed released

The Federal Reserve published its G.19 Consumer Credit report on Wednesday, October 7. The new data cover August 2026 and are preliminary, so they can be revised. The report excludes mortgages and other loans secured by real estate.

• Total consumer credit grew at a seasonally adjusted annual rate of 1.9% in August, down from 4.1% in July.
• Revolving credit, mostly credit cards, fell at a 4.2% annual rate. Balances were $1,352.4 billion, down from $1,357.2 billion in July.
• Nonrevolving credit, which includes auto and student loans, grew at a 4.1% annual rate to $3,844.4 billion.
• Total outstanding was $5,196.8 billion.

Borrowing costs stayed high

The report's quarterly commercial bank rates, which are not seasonally adjusted, showed an average 21.19% on all credit card accounts and 22.36% on accounts assessed interest. The 60-month new car loan rate was 7.54%, according to the same release.

One month does not set a trend. The report does not say why card balances fell, so this article does not assign a cause.

Why it matters for a mortgage application

When you apply, the lender adds your required monthly debt payments to the proposed housing payment and compares the total with your gross income. Card minimums, car payments and student loan payments all count. Paying down a card can lower the minimum payment reported on your credit file, but it also reduces cash you may need for a down payment and closing.

The takeaway

• Pull your credit reports before applying and check each reported monthly payment.
• Ask your loan officer how a paydown would change your ratio before moving money.
• Keep statements that show the payment and balance for every account.
• Do not open new credit during the application unless your lender agrees.