Borrowing can be habit-forming, but Americans love to do it.
With tighter lending standards on autos and home refinancing, consumers are tapping other sources of credit. The average balances on credit cards rose 9.5 percent recently, and balances on home equity lines of credit rose 8.1 percent, according to data from Equifax, Inc., and Moody's Economy.com.
Borrowing is climbing faster in areas where housing prices fell the most, making it difficult to get extra cash from refinancing. The most affected areas in the study were found to be in California, Florida and Nevada.
Rates on some credit cards and home-equity lines of credit have fallen with the Fed rate cuts, making borrowing from those sources more attractive.
Further, as credit standards continue to tighten, borrowers are pulling more money from home equity lines of credit before banks can reduce or freeze their credit lines. In some cases, the extra borrowing is vital to keeping a home. In the worst-case scenario, it is for the cost of excessive living.
With tighter lending standards on autos and home refinancing, consumers are tapping other sources of credit. The average balances on credit cards rose 9.5 percent recently, and balances on home equity lines of credit rose 8.1 percent, according to data from Equifax, Inc., and Moody's Economy.com.
Borrowing is climbing faster in areas where housing prices fell the most, making it difficult to get extra cash from refinancing. The most affected areas in the study were found to be in California, Florida and Nevada.
Rates on some credit cards and home-equity lines of credit have fallen with the Fed rate cuts, making borrowing from those sources more attractive.
Further, as credit standards continue to tighten, borrowers are pulling more money from home equity lines of credit before banks can reduce or freeze their credit lines. In some cases, the extra borrowing is vital to keeping a home. In the worst-case scenario, it is for the cost of excessive living.
1 comment:
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