According to a fresh data published by NY Fed, people with low credit scores are increasingly opting for credit card debt. NY Fed’s latest quarterly report reveals that household debt increased from $35 billion to $12.3 trillion. The factors behind this upward trend are considered to be credit cards and auto loans.

Auto loans have been experiencing a surge for the past six years and the recent auto loan scenario is a continuation of that trend. The scenario is different with credit cards that were badly hit during the Great Recession and took a lot of time to recover. But the credit card spending nature of Americans has moved back in favor of debt since 2014 and credit card balances have gone up, as a result, to $70 billion.

Debt wasn’t promising to Americans during the financial crisis and the early recovery period, as a result of which it fell by $1.5 trillion. But that number has been strongly increasing since 2013 – student loans, credit cards and mortgages being the major driving factors.

High score credit card holders have remained mostly unaffected during the last decade while middle and lower credit score holders have been squeezed out of the credit markets due to various defaults that occurred during the Great Recession and the subsequent credit crunch.

Interestingly, the report spots a continuing positive trend in household debt together with improvement in delinquency rates due to extensive availability of credit

The good news is that today, only 1% of credit card balances are either 90-180 days past due or are genuinely delinquent. Disparaging balances written off by the banks now stands at a notably low point of 6.2%. Foreclosures based on credit reports have also reached the lowest level in the last 18 years. During the 2nd quarter, approximately 1.8% of mortgage balances plunged into serious delinquency – the lowest extent since 2007. Unfortunately, in case of student loans, the delinquency rates at 11% have touched the double digits.