Americans seem to be regaining an appetite for auto loans and leases, credit cards and personal loans, The Wall Street Journal (WSJ) reported.
The demand for these types of borrowing shot up 39 percent year over year in April, and up 11 percent compared to April 2019, WSJ reported, citing stats from Equifax.
The attitude is opposite that of 2020, when consumers by and large weren’t interested in credit cards or personal loans, either out of a lack of need due to stimulus checks or expanded unemployment benefits, or because of the stock market doing so well, according to WSJ. Others just didn’t want to spend money because of the volatility and uncertainty of the economy amid the pandemic.
That all started to change when vaccines were introduced, which helped the economy to spur its recovery, WSJ reported. Now, Americans are spending big on items like cars, vacations and dining at restaurants. The market has also seen an increase in prices for vehicles, which have driven up the need for loans.
Meanwhile, lenders have been signaling that they’re open to more consumer debt after banks tightened the requirements for underwriting at the pandemic’s onset. Lenders also mailed 127 million personal loan solicitations to peoples’ homes in May, an increase from the 60 million from the previous year, WSJ reported.
Consumer credit card debt has plummeted to its lowest rates since 2017, PYMNTS reported, as borrowing fell off in January. Those numbers offset the gains in borrowing for categories such as vehicle and student loans.
January’s decline in borrowing showed that total consumer credit fell 0.4 percent and hit $4.18 trillion.
“We expect growth in consumer credit … will accelerate in the months ahead as spending springs back to life in response to a healing labor market and more fiscal support,” Nancy Vanden Houten, senior economist at Oxford Economics, said in March.