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The typical pattern is for households to run up credit card balances for holiday shopping and then for consumers to pay down credit card balances in the first quarter.

That’s what happens in a healthy economy where consumers are living within their means and aren’t seeing family budgets stretched by high inflation.

But that isn’t what happened in the first quarter of 2023. For the first time in 20 years, consumers added to their debt loads in the first quarter rather than paying down some of their fourth-quarter spending.

In the first quarter, rather than paying down credit card balances, U.S. consumers added another $148 billion in debt. That brought the total to $17.5 billion at the end of the first quarter, according to the Federal Reserve Bank of New York on May 15. Balances are now $2.9 trillion higher than just before the pandemic.

The increase in credit card debt may be an early warning that consumers are stressed by high inflation and that they are using credit cards to maintain spending levels. In another sign that consumers are tapping into available credit balances on home equity lines of credit increased by $3 billion at the start of the year. That increase is the fourth straight quarterly rise.

If consumer spending, which accounts for 70% of UK.S. economic activity, is relying on increased borrowing by consumers that could develop into a real problem for the economy down the road.

The indicator to watch now is the delinquency rate. So far the overall delinquency rate is low by historical levels at 2.6%. But the share of debt that became delinquent–meaning payment is at least 30 days late—-is rising for most loan types, including credit cards and auto debt.

Balancing out this worrying trend, though, is a rise in mortgage refinancings. The New York Fed said that 14 million mortgages were refinanced between the second quarter of 2020 and the fourth quarter of 2021, during which $430 billion of home equity was extracted through cash-out refinances. About 64% of these mortgages were “rate refinances,” where balances increased by less than 5% of the total loan amount. That led to an average payment reduction of $220 monthly for those borrowers.

And that money could be used by consumers to pay down other credit balances–and to keep spending to keep the economy afloat.