Americans owe more than ever before, with household debt hitting a record of nearly $13 trillion. And auto loans, home loans, and credit card debt are all still on the rise, according to the Federal Reserve Bank of New York.
That has some economists saying the lessons of the bubble of borrowing in the run-up to the Great Recession have already been forgotten.
The last time borrowing hit a record, the country was in the throes of the financial crisis. That might sound ominous. But the economy is in much better shape now. Home loans — by far the biggest debt category — are made to people who can actually afford them. And much of the borrowing is arguably responsible.
Sasha Gallagher, who lives outside Richmond, Va., says she and her husband have had several major changes in their lives in the past year. They had a baby in February and recently bought a house. They'd spent their savings on a down payment. So they used a zero-percent credit card offer to buy things they wanted for their new home: a washing machine, refrigerator and a rideable lawn mower.
"We're at roughly $6,000 and it will probably grow because at this point we've got appliances on there but we really haven't furnished the home yet," Gallagher says.