U.S. Consumer Debt on the rise

Posted on October 7, 2007
Filed Under International News |

Consumer debt is on the rise in the United States. Who would’ve guessed? I mean the credit crunch wasn’t that bad was it? Guess again… Yankee consumers have been borrowing at the fastest pace in three months, with increased usage of their credit cards.

The U.S. Federal Reserve reported that consumer credit rose at an annual rate of 5.9-percent in August, the biggest increase since May. The rise was due to an 8.1-percent increase in revolving credit (credit card loans) and an 4.7-percent (annualized) increase in non-revolving credit (auto loans, etc.).

Most of the increase is a result of consumers looking to credit card debt as an alternative to home equity lines of credit to finance purchases - as the lines of credit are now harder to attain.

Our economies, both the Canadian and American, are increasingly revolving around the “buy now-pay later” philosophy. With all the spending, comes more debt, loans, and other bads stuff. With our banks (still) throwing credit at consumers beyond their means, credit education is becoming increasingly important in the sustainment of this credit economy.

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