Consumer credit surge in US, but is this a good or bad signal ?
Most commentators agree that easy credit and a buy now pay later (or never) mentality either on a personal finance basis or on big loans such as mortgages was a significant factor in creating the economic crisis.
On the other hand, in the recessionary environment, what tends to happen is that the pendulum swings too much to a situation where the economy cannot grow because it doesn’t have the fuel of lending, a necessary part of capitalism.
So, it’s a double edge sword in these current conditions when the news suggest that consumer credit is on the rise – on the one hand, good news, on the other, could this be a sign that lessons haven’t been learned and that too many people are still seeking to live beyond their means ?
In news last week, figures suggest that consumer credit in the US increased significantly last November with the biggest rise since October 2001. This equated to a whopping figure of more than a $20 billion rise in outstanding consumer credit.
