Americans, including student borrowers and would-be homeowners, are again becoming comfortable with taking on more red ink.
Personal debt levels are rising again, according to the Federal Reserve Bank of New York, which reported that in the fourth quarter of 2013, Americans ran up the largest such increase since 2007.
Almost all the major categories — including credit-card, mortgage, student-loan and auto-loan levels — were up in the last quarter and on annual basis as well, the New York Fed said.
This is a decided change from the efforts of millions who have been deleveraging, or trying to reduce their debt, over the last four years.
“This quarter is the first time since the Great Recession that household debt has increased its year-ago levels, suggesting that after a long period of deleveraging, households are borrowing again,” according to Wilbert van der Klaauw, senior vice president at the New York Fed.
And the evidence is virtually everywhere.
- Student loans showed the biggest increase in the latest quarter, rising by $114 billion to $1.08 trillion.
- Credit-card debt rose by $11 billion.
- Overall credit levels (except in one category, home-equity lines of credit) rose by $241 billion in the quarter and at the end of the year was $11.52 trillion.
Home equity-lines of credit declined by some $6 billion in the fourth quarter compared with the previous quarter, and the number was also down for the year.
Although borrowing is generally rising, one card-industry observer said it isn’t close to the period when credit was expanding at explosive rates.
“We still have a long way to go to get back to the credit levels of 2008, but it’s clear that credit is starting to trend up,” said Bill Hardekopf, CEO of LowCards.com.