openpolitics.com

The Risk of Rising Consumer Borrowing

Bank investors should start paying attention

Consumers have been ramping up debt in the U.S., adding a potential new risk to banks and a weight on the economy.

.. other forms of consumer credit, including auto, student and credit card loans, have been growing strongly in recent years, helping boost retail spending, a major driver of economic growth.

.. balances have now topped $1 trillion for all three of these consumer debt categories.

1. Credit cards breached that threshold in February, joining
2. auto and
3. student loans above that level. Credit card debt rose to the highest level since January 2009.

.. The bigger issue is whether consumers, who have gotten more serious about saving since the recession, get worried about their debt levels and scale back spending.