Consumers are reaching for their credit cards more and more to make purchases. This is evidenced by new data from the Federal Reserve, which indicates American consumers’ outstanding credit card debt is on track to reach $1 trillion this year.
As the Wall Street Journal reports, credit card debt hasn’t risen to that level since mid-2008, when the number climbed to $1.02 trillion. That was just before the economic crisis hit the global financial industry. This growth in credit card debt is likely a result of a healthier economy and burgeoning job market.
Consumers’ increasing confidence in their spending power has also impacted the auto loan industry. This industry is now seeing record spending. In fact, auto loans exceeded $1 trillion in the first quarter of 2016.
With low interest rates and an increasingly oppressive regulatory environment negatively affecting community financial institutions’ (FIs’) bottom lines, credit cards are proving to be a healthy business line for FIs today.