US household debt hits record high
Debt from student loans, auto loans and credit cards prompts fears of default wave
Household debt in the US has reached a new peak, surpassing the high reached in the run-up to the 2008 financial crisis, reports the Financial Times.
While mortgage borrowers’ finances remain strong, student loan, auto loan and credit card delinquencies are on the rise. Student loans now have the worst delinquency rate among consumer credit categories.
But the US$1.3 trillion of student debt currently owed still pales in comparison to the US$8.6 trillion mortgage market. Though the rising debt is not a good sign for the US economy, it does not represent the threat to the global financial system that the subprime housing loans did in 2008.