For U.S. Consumers, Borrowing Is a Good Idea Again

Gabriela Magallanes, 23, a hospital research assistant in Raleigh, N.C., bought a black 2013 Hyundai Elantra in May after her 24-year-old car broke down. She tapped the auto manufacturer’s finance subsidiary for a 60-month loan at 2.9 percent, with monthly payments of $337. “I definitely could not have gotten a better rate,” says Magallanes. “I felt very secure I could make my payments.”

Americans have made progress putting their finances in order and are ready to borrow again—giving the world’s largest economy another engine of spending and growth. Household net worth reached a record high in the first quarter, Federal Reserve data show. Consumer loans are rising, while the American Bankers Association reports the percentage of bank-card holders who are delinquent is the smallest since 1990.