Household debt has risen to $14.3 trillion over the first 3 months of the year. That’s $1.6 trillion higher than the record set during the financial crisis. Surprisingly, credit card debt dropped during the same period which has helped to offset rises in education and auto debts. This is all at a time when Americans are trying to adjust to the coronavirus pandemic.
Household debt hit an incredible record of $14.3 trillion which is a 1.1% increase from the previous quarter and $1.6 trillion clear of the previous high at $12.7 trillion which hit in the third quarter of 2008 during the financial crisis.
Even though credit cards fell $34 billion which has helped offset non-housing balance increases of $27 trillion in student loans and $15 billion in auto debt. Mortgage balances hit $9.71 trillion which is a rise of $156 billion.
The drop in credit card balances is actually larger than the same time last year. This pretty much reflects early signs in consumer spending due to COVID-19, according to the New York Fed.
The decrease in card balances was evident even though total credit limits rose by $35 billion leaving $3 trillion in available credit lines. The U.S economy has been shut down in order to halt the coronavirus. Retail sales have dropped sharply during a time that consumer confidence has dropped.
After an upswing in the first quarter, student loans total $1.5 trillion. Some of the accumulated debt was delinquent for over 90 days at 10.8%. Even though the debt delinquency dropped down to 4.6 %.