American consumers are borrowing again, and creating records like it’s nobody’s business.
The Federal Reserve said in a new report Monday that total borrowing surged $24.5 billion, up from $16.2 billion in October. This is the fastest pace that debt has climbed in three months.
In total, United States consumer debt has soared to a fresh record of $3.75 trillion.
According to the U.S. central bank, the biggest jump was in credit card debt, which advanced $11 billion in November, up from $2.4 billion in October. This will certainly please retailers because this was the beginning of the Christmas shopping season.
Meanwhile, the acceleration of debt in auto loans and student loans experienced a hiccup in November. They rose $13.5 billion in November, down from a $13.8 billion increase in the previous month.
As interest rates go up, the debt servicing payments will surge. With the minuscule rate hike by the Fed just prior to the end of the year, U.S. consumers are expected to pay $1.4 billion in extra credit card interest payments.
Please note: the Fed’s monthly consumer credit report does not include mortgages and other loans pertaining to real estate.
The borrower is always a Slave to the Lender.
Having a limited amount of debt allows the individual to live a less stressful life while not playing the debt game that eventually collapses.
What game are you talking about, that collapses? I have moved high interest credit card debt to a lower interest fixed interest loan, paying it off in 24 months = savings $1,100.
This improved my credit score and I now have 6 credit cards with zero interest for 12 to 18 months. I went from having $10,000 in available credit to $30,000 in just 12 months. No one says you have to use all the credit that is available. No slave here, just a smart consumer, who always pays more than the minimum payments. I will have all my accounts paid off in August 2018.
My income will increase 66% in Feb 2018 when I start getting my SS benefit and I will then be able to use my credit card accounts and pay the balance in full each month, no interest charge. I see credit as a tool, just do not take on more debt than you can service and pay off in 12 to 18 months. Credit allows me to spend time with family 6 to 8 months out of the year, now that I am retired. By the way I have not had a car payment since 1986. 10 cars purchased with cash.