NEW YORK (Reuters) – Debt-laden Americans are borrowing yet more, but the days of luxury purchases like spa vacations and plasma TVs may be gone. Instead, consumers are taking out bigger loans against their homes or boosting credit card spending to offset such things as rising interest payments on previous purchases and higher costs at the gasoline pump, analysts said.
"Consumers have found a way to live beyond their means and postpone their day of reckoning," said Greg McBride, senior financial analyst at Bankrate.com, a financial-services data provider in North Palm Beach, Florida.
On Tuesday, theleft the key federal unds rate unchanged at 5.25 percent, after raising it 17 times in two years, on the view that slowing economic growth will contain inflationary pressure.
In the second quarter, U.S. homeowners who refinanced their mortgages converted $81 billion of home equity into cash, up from $74 billion in the first quarter. Half of the borrowers who paid off their mortgages got new ones at rates almost 7 percent higher, according to home finance giant Freddie Mac . read more at Yahoo News