Household Borrowing on the Increase!

Credit cards

In the last year, American families have been borrowing money at the fastest rate since the global financial crisis, according to new data. That indicates there may be improving consumer confidence in the economy and increased spending.

Household debt in the United States rose by a massive $241 billion in the last quarter of 2013, it’s biggest increase since mid 2007, before the global financial crisis really took hold. A big part of that was a $152 billion gain in mortgage debt, which may be related to the rate of foreclosures may be reducing according to economists.

The rate of new mortgages actually slowed probably due to the higher interest rates in the quarter. The total household debt in the United States is now $11.5 trillion, which is 9.1% below the peak of $12.7 trillion in 2007.

Despite this increase in consumer spending, there are still many people in the economy are struggling with too much debt. According to a new survey, half of the United States population has more credit card debt than they have emergency savings, a sign that they are not in a good place financially.

Interestingly, it was the main working age bracket of between 30 and 60 that were more likely to have more debt than savings. During those years you need a rainy day account in case you suddenly lose a job or suddenly need funds for an emergency. The fact that so many people don’t have significant emergency funds set up indicates they are struggling with debt burdens.

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