From August 2012 to August 2013, auto, bank and retail credit card balances all increased, and those higher balances went hand-in-hand with lower delinquency rates. Retail credit card balances have been growing for 24 consecutive months, while total auto loans are at a five-year high.
Equifax chief economist Amy Crews Cutts says the data “indicates that the American consumer is being very disciplined in their use of credit. It's like they've gone on a debt diet and they are really sticking to it, with modest increases in line with capacity to repay."
Total consumer debt is down 15% from its highest level, and default rates have returned to their pre-recession numbers, excluding student loans. Mortgages and student loans continue to have high delinquency rates in the wake of the economic crisis. “Hopefully we will see those improve more quickly in coming months," said Cutts.
Auto loan data shows a total of more than 61 million loans outstanding in August 2013, the highest in 57 months. Bank-issued credit card loans stand at $93.3 billion, a five-year high. Retail credit cards are at $34.2 billion, with 18 million new loans originating between January and June of this year. Home loans are broken down between first mortgages and home equity lines of credit, with first-time borrower loans at $7.7 trillion and home equity loans at $136.7 billion.
Loans to subprime borrowers are up in the retail credit card category, indicating lenders more willing to take risks on those with limited credit. Equifax defines subprime borrowers as those with a score lower than 660.
More credit being issued to high-risk borrowers is widely regarded as a sign of an improving economy. Increasing balances combined with falling delinquency rates is also an indicator of better economic times, because it means borrowers are confident about taking out more loans and are able to keep up with the payments on those loans.
Read Also Related News
Bankrate has recently conducted a survey of U.S. consumers’ payment habits amid the coronavirus. According to it, the number of Americans paying for grocery purchases with credit cards increased significantly in April and reached 46%....
The coronavirus pandemic has caused significant damage to the economy of the country and the whole world. No wonder that spending habits of Americans have also undergone some changes. For example, since the borders of many countries has...
Recently U.S. News & World Report - a multi-platform publisher of news and information, conducted an online credit card debt survey with more than 1,000 adult respondents. It turned out that a huge number of American cardholders were...
I need a credit card with a 0% APR to consolidate several of my credit cards into one payment. Please advise what card I can apply.
There are special credit cards that allow consolidation of other cards’ debts - the balance transfer credit cards. These cards usually come with a 0% intro APR on balance transfer offer. The zero introductory period varies, but as a rule it is between six months and two years. So you can find a credit card with...
The easiest way to find out if you have credit accounts under your name is to request a copy of all your three credit reports: Experian, Equifax, and TransUnion. The reports contain information about active credit accounts, its issuers, and the information about credit accounts balances. If you want to protect yourself...
To set a PIN on your credit card, you should call the credit card issuer at the number on the back of your credit card and request your PIN. After that, the issuer will mail to you your PIN. In the meantime, if you need cash, you can go to a bank office and present your credit card and picture ID.
The overall process of getting a credit card can take up to 30 business days. To know the status of your credit card applications you should contact the credit card issuer. A quick online search for the bank or credit card issuer's name should turn up a customer service phone number or email address. Banks and credit card...