The recession-induced frugality and financial responsibility may be wearing off as the economy improves, a report indicates.
"After years of cutting debt levels," says Kathleen Madigan at The Wall Street Journal, "consumers are willing to borrow again."
The news comes from the Federal Reserve, which released December's consumer credit statistics.
Justin Loiseau at The Motley Fool explains the overall rise.
"After advancing at a seasonally adjusted annual rate of 4.8 percent for November, this month's consumer credit pushed ahead on a sizable $5 billion increase in revolving credit. In absolute terms, analysts had expected an overall $12 billion rise, $6.8 billion short of actual expansion."
Reuters says the non-revolving credit (auto loans, student loans and the like) rose $5 billion in December versus going up $465 million the month before.
Non-revolving credit such as credit cards really jumped up though, the report indicates.
"Non-revolving credit, which includes auto loans as well as student loans made by the government increased $13.8 billion in December," Reuters says.
"Gains in household wealth tied to higher stock and property values are giving Americans the wherewithal to carry bigger credit-card balances as the job market struggles to pick up," says Katherine Peralta at Bloomberg. "Stronger wage growth would help provide more fuel for the consumer purchases that account for almost 70 percent of the economy."
Americans aren't the only ones jumping back into debt, however.
Madigan, in her article at The Wall Street Journal, quotes economist Kristin Reynolds: "Evidently, consumers increased their borrowing to finance some of their holiday spending."1 comment on this story
Michael Klimes at International Business Times says consumer credit in the UK "in the form of credit cards, car financing, personal loans and mortgages, is set to hit its highest level since 2010."