US consumers stepped up borrowing in March

U.S. consumers swiped their credit cards more often in March after cutting back during the previous two months. The increase helped drive overall borrowing up by the most in more than a decade.

Attitudes towards debt on credit cards began to change long before the financial crisis, according to The UK Cards Association. In a new report, the trade body tracks the shift in spending and borrowing on plastic from 2000 through 2010, labelling the period “a decade of two halves”. From 2000 to 2005, banks and other lenders recorded strong growth across all forms of card use in the UK, followed by a “sharp retrenchment” thereafter in the use of credit cards.

Americans took out more loans to buy cars and attend school in February but used their credit cards less frequently for the second straight month. The Federal Reserve said consumers increased borrowing by $8.7 billion, the sixth straight monthly increase. » E-Mail This     » Add to Del.icio.us

Americans stepped up borrowing in December to buy cars and attend school. But they cut back sharply on credit card use, continuing a trend that could hold back growth this year.

TORONTO — The Royal Bank says February marked the slowest year-to-year growth in Canadian household debt in more than a decade. RBC Economics says overall household debt stood at $1.67-trillion in February, up 4.5% — the smallest 12-month increase for any month since June 2001. Total Canadian mortgage debt stood at $1.16-trillion in February, up 5.4% compared with the same month last year — the smallest since November 2001.

More American homeowners will be able to use their properties as cash machines again after real estate equity jumped last year by the most in 65 years. Property owners recaptured US$1.6 trillion as home values climbed to the highest levels since 2007. The amount by which the value of the houses exceeds their underlying mortgages rose to US$8.2 trillion last year, a gain of 25%, according to Federal Reserve data.

Federal Reserve Chairman Ben Bernanke’s efforts to revive housing are making real estate bulls even more bullish. JPMorgan Chase & Co. more than doubled its forecast for U.S. home price gains in 2013 to 7% this week, and predicts a more than 14% increase through 2015. Bank of America Corp. said last week property values will jump 8% this year, up from a prior estimate of 4.7% in a report titled “Someone say house party?”

Americans stepped up borrowing in January to buy more cars and attend school.