Consumer debt may be rising again

Consumer debt has been declining over the past two years, dropping from its height in 2008 at 8.2 percent, according to Business Insider, and indicating an improvement in consumer credit reports. However, this downward trend may be on its way back up, as household debt within the country increased by 0.3 percent during the first quarter of the year, a new report released by the Federal Reserve has indicated. The report revealed that rates on delinquencies, foreclosures and bankruptcies are improving, and that consumer debt - including mortgage, credit card and student loans - is less than it was at its height in 2008 and 15 percent less than it was last year. "It is still unclear whether or not consumers are paying their debts on charge offs that occurred because of defaults, according to the Fed's data," Ilana Greene reported for Business Insider. "The amount of charge-offs totaled $822 billion of household debt from mid-2008 to the end of 2010." Since the recession, debt has become second nature to most Americans, as they have struggled to stay on top of payments and have often had to choose between making mortgage or credit card payments. Recently, the Washington Post reported that consumers have begun to pay off their outstanding credit card payments - totaling more than $100 billion in debt - giving them higher priority than mortgage debt. According to Business Insider, U.S. households have raked in a total of $658 billion in mortgage and credit card debt. During the mid-2000s, this figure was greater than $10 trillion. Credit card limits increased at the start of this year to $30 billion, which represents a drop from 2008 levels. Additionally, the number of open credit accounts is still 24 percent less than 2008 and balances are 20 percent lower. For the sixth consecutive month, consumers' borrowing has improved dramatically, Business Insider noted, indicating more optimistic banks with less strict lending policies. Additionally, the Post noted that TransUnion's Credit Risk Index had also witnessed a decrease, likely indicating that consumers are paying their credit obligations back and improving their credit management skills.