More consumers leaned on their credit cards in the first quarter, across Citi (C), JPMorgan Chase & Co. (JPM), and Wells Fargo (WFC) cards. Yahoo Finance reporter David Hollerith joins Wealth! to discuss what this tendency means for consumers and their finances.

Spending and credit card loan balances have gone up year over year, Hollerith says. As business loans have been growing at a slower pace, Hollerith calls the increased consumer spending and balances a "bright spot" for these banks in terms of loan growth. However, it is difficult to pinpoint sticky inflation as the direct cause of higher credit card spending, Hollerith adds.

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This article was written by Gabriel Roy

Video Transcript

BRAD SMITH: More consumers leaned on credit cards this quarter. At least that's what Citi found. What does this say about the consumer and their finances?

DAVID HOLLERITH: Yeah, Brad, it was actually true across Wells Fargo and JP Morgan cards. And it shows year-over-year spending and credit card loan balances have gone up, which is sort of-- it's been a bright spot for these banks in terms of loan growth for the last year. Business loans and commercial real estate loans are growing at a much slower pace. So it's pretty important for them.

I'd also point out that the credit losses and provisions for future credit losses around this area also were reduced for the quarter. So it appears at the moment that the banks are seeing credit and consumer consumers still going strongly and then also credit looking more favorable. We did ask Jamie Dimon, CEO of JP Morgan about stickiness of inflation, which obviously gets into consumers' wallets and could, in part, explain some of the behavior.

And he said the fact that one reading doesn't really matter that much. And I'm paraphrasing. But also that it really depends on how the economy takes it, whether or not what we're seeing right now is healthy growth or something more akin to stagflation. So it's kind of difficult to tell right now what higher credit card spending means. It does, of course, have a lot to do with what happened at the end of March 31 as opposed to what we found out this week from the inflation report.

BRAD SMITH: Yeah. David, I hear you got a question into JPMorgan CEO Jamie Dimon as well. Sounds like he was taking some questions from reporters. And great to hear that you had some representation on that call as well as our own Brian Sozzi. David, appreciate the time and the breakdown this morning.