Statistics revealed that U.S. consumers increased their debts in the last month of 2012, largely for either educational expenses or auto purchases. Credit card use, however, was way down. Debt is a major factor in consumer decisions to file for personal bankruptcy in Maryland and nationwide.
The total amount of new debt incurred by consumers in December went up $14.6 billion from the month before. With the addition of this new debt, overall accumulated consumer debt reached a total of $2.78 trillion, an all-time record amount.
Borrowing for educational and car loans accounted for most of that increase, reaching the highest level since November of 2001. Total accumulated student loan and auto loan debt now tops $1.9 trillion.
By comparison, credit card debt has experienced a sharp 17 percent drop since June 2008, now reaching around $850 billion, including a December 2012 drop of $3.6 billion. Many consumers may have become unwilling to run up more credit card debt based on fears engendered by continuing high unemployment rates and the increase in payroll taxes for Social Security that went into effect on Jan. 1. Credit cards have been increasingly out of favor with consumers since the recession began.
While the statistics available do not differentiate auto loans from student loans but lump them all together, analysts say that ever since the beginning of the recession, student loan debt has increased more rapidly than auto loan debt. The total amount of student loans outstanding now runs to $956 billion based on September 2012 figures, which is the most recent data available. This represents an astonishing 63 percent increase since the middle of 2008.
Source: Minnesota Public Radio, “US consumer debt up in Dec. on student, auto loans,” Martin Crutsinger, Feb. 7, 2013
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