Americans are much more confident with debt these days, especially with their credit cards. Credit card use is currently at its highest usage amount since 2010.
According to the Federal Reserve’s monthly report on consumer credit, Americans increased their credit card usage in May at the fastest rate since the fall of 2010.
Over the course of the month, credit card debt went up by $6.6 billion and puts total outstanding credit card debt at just below $850 billion.
While this is the highest amount of credit card debt since September 2010, it is still below the record high of $1.02 trillion that was set in July 2008 at the very beginning of the financial crisis.
Americans are also becoming more comfortable with other types of debt. They increased their borrowing by $19.6 billion in May compared to April which is the biggest increase since May 2012.
This puts total borrowing at $2.84 trillion — a new record.
While the Federal Reserve’s credit report doesn’t break down the outstanding debts by categories, the main driver behind higher debt levels is likely student loans. Many Americans went back to school during the current financial crisis.
This increased borrowing may be a sign of an improving economy.
Despite this growing confidence, Barclay economist Cooper Hayes doesn’t expect credit card debt will get back to pre-recession levels. Instead, he thinks student debt will keep increasing quickly, but credit card debt should start leveling off soon.
Hopefully Americans are able to find the right balance with their finances to continue stimulating an economic recovery without getting too far into debt.
Source: abclocal.go.com. Photo source: quizzle.com.
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