Credit-card debt breached the $1 trillion threshold in the U.S., joining auto loans and student debt in crossing that level, and hitting its highest mark since the nation’s last recession.
New data from the Federal Reserve shows the new growth of household debt. There is a rise in borrowing, however, that is a good sign for the U.S. economy. This is a sign that consumers are spending money big ticket items such as cars while smaller items are being charged to their credit cards.
As per the Federal Reserve states that for December the credit card debtlevek is $1.0001 trillion. For December the Fed reported $998.9 billion. With the February data pushing the debt in to the trillion mark that makes credit cards the third consumer lending category. Auto loans and student loans lead the race before credit cards.
The latest number placement reflects changes in the economy. Simply put, borrowing is up. In particular auto and student loans have gained better footing. The housing bubble burst also had much to do with it despite the downturn and crisis.
In the credit card market there is broadcast of some gloom. The credit card market is seeing more consumers miss payments. Thew rise in interest rates is the challenge. The variable interest rates pose risks. E Fed has implemented three interest rate increases since 2015. If the Fed continues to raise the rates consumers will be faced with paying larger monthly payments.