A decrease in consumer money holdings, often due to increased credit usage, will always lead to higher equilibrium interest rates in the money market.

When consumers hold less cash and rely more on credit, there is less money available in the money market. This reduced supply of money means banks have fewer funds to lend. As a result, to encourage people to deposit money or to borrow less, banks will raise interest rates. Higher interest rates make borrowing more expensive, which can slow down spending and investment. For example, if a person usually keeps $200 in cash but shifts to using credit cards, the overall money available in the market decreases, leading to higher interest rates for loans.