Credit card balances increased year-over-year for the first time in five years, according to a report released Thursday from credit reporting bureau Equifax.
Balances totaled $536.5 billion at the end of July, up less than 1 percent from $533.3 billion the year before. At the same time, serious delinquencies -- at least 120 days past due -- fell 11 percent to 1.86 percent of all outstanding balances in July versus a year ago.
The report contained other milestones for credit cards, which exclude store credit cards. The total amount of new credit opened between January and May of this year reached $77.7 billion, the highest level since 2008 and a 6 percent increase over the same period last year. The total number of new cards issued also hit a five-year high.
The data suggests that consumers are starting to feel more confident about their personal finances and the overall economy, says Robert Hammer, owner and CEO of R.K. Hammer, a bank card advisory firm in Thousand Oaks, Calif.
"We are heading in the right direction, but there's still some caution," says Hammer.
Other barometers back up the cautious optimism.
Bankrate's Financial Security Index has remained in positive territory for six straight months, even though the readings from July and August backed away from the all-time high reached in June. Similarly, the Consumer Confidence Index from The Conference Board, a private research firm in New York, rose to its second-highest reading since January 2008 in August. The highest reading in the past five years was in June.
The Equifax report also found that student loan debt swelled 11.3 percent year-over-year and auto loan balances swelled by 10.9 percent.
Balances on loans related to homes all fell from the prior year. First mortgages slipped 0.9 percent. Home equity loans decreased 4.1 percent and home equity lines of credit, or HELOCs, declined 8.9 percent.
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