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New Jersey residents taking on more credit

The month of October showed a surge in credit purchasing from consumers across the country. According to information provided by the Federal Reserve, the $18.2 billion rise in consumer credit represented the highest such increase in five months. Borrowing has been driven by credit card debt along with non-revolving credit such as car loans and education spending.

Credit card spending in particular rose the most since May, and this has been attributed to an improvement in the job market that has led to income growth and an increase in discretionary spending. Experts believe that this additional income has led consumers to be less wary about taking on debt.

Non-revolving debt also grew at a solid pace, and it has been the main type of credit that people have availed themselves of since the beginning of the recession. People have been purchasing automobiles in large numbers, and vehicle sales are on pace to meet or exceed those of 2007. Cars and light trucks were sold at an annualized rate of 16.3 million in November. Along with an increase in automotive purchases, another area that people borrowed money for was education. A large portion of the $5.2 billion in consumer loans made by the government in September was for tuition purposes.

While the increase in borrowing may be due to an improving economy, it is often very easy to get into debt and much harder to get out of it. People who are unable to keep up with their financial obligations may find that filing for bankruptcy may help them regain control of their situation. An attorney with experience in bankruptcy law may be able to determine if certain forms of debt relief are appropriate.

Source: Bloomberg, “Consumer Credit in U.S. Rose in October by Most in Five Months“, Michelle Jamrisko, December 06, 2013

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