Americans Taking On Auto Loans, Credit Cards at Record Rates
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Here's your Money Briefing for Tuesday, July 13th. I'm J.R. Whelan for The Wall Street Journal. Last year, the pandemic forced many Americans to keep their credit cards in their wallets or pocketbooks and significantly reduced their appetite for taking on more debt. But what a difference a year makes. As restrictions are lifted and the country reopens, the doom and gloom of a year ago has turned into a credit boom.
Basically across the board where demand is on the rise extends beyond auto loans and leases to credit cards as well as to personal loans.
So what does this mean for consumers and how are lenders responding to the sharp rise in borrowing? We'll ask our consumer credit reporter, Anna Maria Andriotis, after the break.
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Consumers are back to borrowing. New auto loans and leases and credit cards are up significantly from a year ago and from 2019. But why are banks willing to lend to so many when some consumers have recovered faster than others? In just a minute, we'll hear from one person who's felt more confident taking on new debt. But first, our consumer credit reporter, Anna Maria Andriotis is here to give us the big picture. Anna Maria, thanks for coming on the show.
Great to be speaking with you.
So what kind of numbers are we talking about here? And how much has borrowing rebounded?
How has borrowing behavior changed since pandemic restrictions lifted?
So for auto loans and leases, there were about 3 million of them that were originated in March. That's up about 53% from. the same month in 2020, and it's also the highest monthly figure on record. This is all according to Equifax, a major credit reporting firm in the US. Not only are the number of auto loans and leases given out up significantly, but so is the total dollar amount of these loans that are being extended. So balances for new originations on auto loans and leases also hit a record of nearly $74 billion in March, up 59% from the prior year. On the credit card front, nearly 6 million general purpose credit cards were given out in March, Up 32% from a year earlier and the highest March figure on record.
So several record-breaking figures here for the auto loans and leases as well as credit cards that are being originated. This is according to the latest data, the March data from Equifax.
Wow, so consumer confidence is coming back. Now you mentioned auto loans, where else are people borrowing?
So basically across the board where demand is on the rise extends beyond auto loans and leases to credit cards as well as to personal loans. So looking at just what's been going on with consumer demand in April, consumer demand for all of these financing options was up 39% compared to to a year prior and also up 11% compared to April of 2019. That's really important to point out because last year there was such a pullback in credit, demand for credit, that it'd be natural to assume, well, of course the numbers will be up this year compared to last year when the pandemic took hold. But what's most interesting here is seeing that the increase in consumer demand for credit
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