With the economy slowly improving and consumers once again feeling better about their personal financial situations, many are now seeking new types of financing.
Consumers’ interest in a few different kinds of new credit picked up in the first half of the year, and that willingness to take on more balances extended into August as well, according to the latest National Consumer Credit Trends Report issued monthly by credit monitoring bureau Equifax. In many cases, the number of new accounts now being opened is roughly in line with levels not seen since the recent recession began.
This trend was led largely by auto lending, of which new accounts rose to values of approximately $207 billion in the first six months of the year, up 13.7 percent from the numbers seen in the same period last year, the report said. That was spread across 10.7 million loans, the largest six-month figure observed since 2007, when 11 million new accounts were originated.
“The average age of cars on the road today in the U.S. is the highest ever recorded and consumers are ready to replace these older vehicles,” said Equifax chief economist Amy Crews Cutts. “At the same time, the financial picture has improved sufficiently that we are seeing auto lending markets become facilitators rather than obstacles to meeting this demand, especially in the near-prime segment of the market that had all but ceased to exist during the worst of the financial crisis and recession.”
Meanwhile, a larger number of both bank- and retailer-issued credit cards were originated during this time as well, the report said. This included new accounts with available balances reaching $87.3 billion through June, up more than 36 percent from the low observed during the recession of $55.5 billion in 2010. Retail cards climbed 15 percent to $30.4 billion in the first six months, up from $25.8 billion two years ago.
Student loans similarly climbed 15 percent between 2010 and 2012, to $30.3 billion from $25.6 billion, the report said. Overall balances outstanding stood at more than $800 billion through the end of August.
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Consumers have generally been more interested in credit in the last several months, even as certain parts of the economy, such as income and unemployment, remain somewhat stagnant.
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