Americans took on lots of debt in January, a possible indication that consumers are feeling better about the economy and are starting to spend more freely, according to a report published this week by the Federal Reserve.
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The total value of debt and loans extended to consumers grew by $17.7 billion in January. That was a significantly faster rise than was predicted by economic analysts polled by Reuters. It was the fifth straight month in which households took on more debt.
The larger-than-expected increase was powered by non-revolving debt, which includes things like student loans and car loans. Such debt grew by a whopping $20.7 billion, to $1.711 trillion. Meanwhile revolving debt, which is mostly comprised of credit card balances, dropped by nearly $3 billion.
That could be good news for consumers, since credit cards typically charge significantly higher interest rates than things such as student loans. The total amount of revolving debt has hovered around $800 billion since 2010, a significant and sustained decline from the years prior to the recession. Total revolving debt in 2008 climbed to $957.5 billion, according to the Fed.
Image: JollyUK, via Flickr