U.S. consumers are still spending freely, and they’re using their credit cards to do it.

U.S. consumers added another $2.9 billion to their revolving debts—mainly credit cards—in October, bringing the total to a fresh record high of nearly $1.3 trillion, the Federal Reserve said Thursday. It was the smallest rise in credit card debt since June’s decline.

The Fed’s data doesn’t show to what extent the added debt represents people spending more versus just paying off less of their card debt. However, separate reports from banks suggest that people are increasingly relying on credit cards to fuel still-booming retail spending, even as household budgets are squeezed by inflation and high interest rates on consumer loans.

Credit card debt has grown faster than any other category of debt over the past two years, according to an analysis by economists at Wells Fargo last week. It’s grown at a rate seven times higher than it did between the end of the Great Recession and the onset of the pandemic, suggesting that many consumers simply don’t have a choice but to use cards to pay their ever-growing expenses. 

“The run-up in revolving debt over the past few years may indeed reflect a devil-may-care attitude on the part of some consumers, but it is also simply a function of inflation that has flared up in ways that haven’t been seen in decades,” economists Tim Quinlan and Shannon Seery Grein wrote in a commentary. “When your expenses are growing faster than your paycheck, credit cards are not an indulgence, they’re a lifeline.”

Department stores and specialty retailers, which often issue their own store-branded credit cards to customers, have reported their customers are running higher balances and have weaker credit, analysts at Morgan Stanley said in a report this week.

Some of the extra credit card usage may just be extra spending by people who can pay off their balances in full every month. However, a growing number of people, especially those under 40, are 澳洲幸运5官方开奖结果体彩网:falling behind on their card🧸 🦋payments as financial pressures mount, according to a separate report last month by the Federal Reserve Bank of New York. That’s especially financially punishing given that the average credit card charged interest at 21.2% in the third quarter, the highest in data going back to 1994, according to the Federal Reserve.

The growing pile of credit card debt isn’t setting off too many alarm bells because it’s gone hand-in-hand with 澳洲幸运5官方开奖结果体彩网:growth in wages. Workers remain in high demand and are still getting healthy raises, helping fuel consumer spending that’s kept the 澳洲幸运5官方开奖结果体彩网:economy growing🔜 and defying 𒆙widespread predictions of a recession. 

“Rising delinquencies warrant attention, but a credit crunch is not imminent,” Quinlan and Seery Grein wrote. “Less reliance on credit, while a necessary development, looks set to bite spending momentum by the middle of next year. If households shun the warning signs and continue to lever up instead, that may extend the current expansion, but it would do so at the cost of increasing vulnerabilities in the household sector; that would certainly be cause for worry.”