Consumer debt falls, now at pre-recession levels
After hitting highs in October 2008, consumer debt has shown steady declines and now sits near pre-recession levels, Equifax said in a recent report.
Equifax’s National Credit Trends Report revealed that total consumer debt now sits at $11.2 trillion, which is almost identical to the $11.1 trillion mark established back before the recession in 2006.
Total consumer debt topped out at $12.4 trillion back in October 2008.
According to Equifax, more than $436 billion in new credit originated in the first seven months of 2011 (January through July), which represents the highest total in 3 years (for that time period). “New credit” includes auto loans, consumer loans, home equity lines of credit, student loans, and credit cards.
Despite overall debt numbers falling, the credit card category is showing an increase in usage in debt. Between the four months of June through September 2011, both bank credit cards and retail credit cards – as a whole – saw outstanding debt increase.
More than 11.3 new auto loans originated in the first seven months of 2011, Equifax said, a 13 percent increase year-over-year.
On the flipside, home equity loan activity continues to decline. In September 2011, home equity installment loan balances sat 13 percent lower than September 2010, while home equity revolving loan balances sat 6.6 percent lower than a year earlier.
See also: Home equity loan vs. line of credit