Americans have reined in their credit card spending since the Great Recession and household finances have generally improved. But student and auto loans have skyrocketed, intensifying concerns that they are creating new challenges for consumers. Young Americans saddled with student debt may not be able to buy homes or spend on other items the way previous generations did.
And more Americans with checkered credit histories are obtaining auto loans, which raises the risk that millions of them could default. New auto loans reached their highest level in eight years this spring, the New York Federal Reserve said.
Student loans have soared since the recession ended, topping $1.1 trillion by the second quarter of this year. That’s up from $700 billion in 2009.
Still, consumers are reluctant to build up their credit card balances. Many have likely switched to debit cards instead. Total outstanding credit card debt was more than $1 trillion when the recession hit in December 2007. The total bottomed out at about $835 billion in April 2011 and has only recovered gradually since then.
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