PhotoHousehold debt reached a record high in the first quarter as consumers increased their use of all kinds of credit, but for the most part did a little better job of keeping up with the payments.

That's one of the takeaways from the Quarterly Report on Household Debt and Credit, issued by the New York Federal Reserve. For consumers, it provides a snapshot of how we're doing financially.

One of the facts that immediately jumps out from the report is the total first quarter debt total of $12.73 trillion, with the Fed noting it's higher than the total debt reached in 2008. Whenever that year is used as a benchmark, it's noteworthy because that was the year of the financial crisis, when the economy teetered over the edge of a cliff.

But the report's authors point out that it has taken nine years for total consumer debt to surpass that peak. That, they say, is an unusually long time.

Different from 2008

Donghoon Lee, Research Officer at the New York Fed, says the composition of that debt today is very different from 2008, when a lot of it was made up by subprime mortgages. And, he says the consumers who are holding that debt look different than they did nine years ago.

“This record debt level is neither a reason to celebrate nor a cause for alarm," Lee said. "But it does provide an opportune moment to consider debt performance.”

That is, how are consumers managing their debt? There, the results are mixed. While mortgage delinquencies are down -- a big change from 2008 -- the delinquency rates on credit cards, auto loans, and student loans are trending higher.

Student loan debt

Student loan debt is particularly troubling. In its analysis of the Fed report, Bloomberg News presents a sobering statistic; in 2003 student loan debt made up just 3.3% of the typical U.S. household debt. Now, it's 10.6%.

Worse still, consumers with student loans are having more difficulty making the payments. The percentage of severely delinquent -- loans that are at least 90 days behind -- is more than three times the delinquency rate on all household debt.

Mortgage delinquencies increased a small amount, perhaps a reflection that mortgage balances increased during the period. At the same time, credit scores of new borrowers increased, suggesting banks are being more careful about making loans.

For credit cards, balances declined slightly after a huge run-up last year but delinquencies increased, along with credit limits -- perhaps a trend to keep an eye on.

But on the whole, the Fed's report suggests, at least for now, consumers are handling their increasing debt loan. Bankruptcy notations hit an 18-year low.


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