No interest until 2014,” read the massive red sign outside big’s furniture in Henderson, Nev. It beckoned Diane Lewis to the store’s year-end liquidation sale. “I had to pull in,” she said as her sons frolicked on mattresses nearby. “We really need to get us a new bedroom set; their old one is kinda beat up. If we can get that financing deal, we can make it work.”

They’re two months behind on their mortgage, “but we’re gonna catch up,” and she figures the family probably owes about $20,000 on various credit cards. “I know I probably ought to wait a little longer,” said Lewis, a hairdresser, “but this is a pretty good sale, so I think we might buy something if they’ll approve us. I mean, 2014 is a long way off, you know?”

There is nothing wrong with debt.

Nearly a year and a half ago I was one of the first to identify a huge stealth stimulus the government, Fed, and banking system was creating - the strategic default stimulus. [Nov 25, 2009: America's Stealth Stimulus Plan; Allowing It's Home "Owners" to be Deadbeats] By the spring of 2010, Cramer and quite a few in the financial blogosphere began picking up on it. Now as we enter spring 2011, we are seeing truly how pervasive this stimulus has become per a whopping statistic on Mish Shedlock's blog. Regular readers will know that 1 in 10 American households that has a mortgage is now in default. But of that 10% of our home "ownership" class (I use the word loosely) living 'rent free', nearly 1 in 3 has not made a mortgage payment in 2 years. That's astounding.....

Dec. 2 (Bloomberg) -- The spectacle of hordes of shoppers schlepping through the mall at midnight with children in tow, stuffing their carts after stuffing their bellies, was a sight to behold. And apparently one to cheer.

U.S. stocks soared on Monday following reports of a bang-up start to the holiday shopping season. Black Friday sales rose 6.6 percent from last year to a record $11.4 billion while “retail foot traffic” -- now there’s a metric you can take to the bank -- rose 5.1 percent, according to ShopperTrak, a Chicago research firm.

The National Retail Federation said U.S. shoppers spent a record $52.4 billion during Thanksgiving weekend in stores and online, a 16 percent increase over last year. Online sales soared 33 percent on “Cyber Monday,” according to IBM. The market-research firm comScore Inc. said it was the single- biggest online-shopping day in U.S. history.

Consumer spending accounts for about 70 percent of U.S. gross domestic product. As the consumer goes, so goes the nation.

Not so fast......

(Reuters) - Consumers went back to using their credit cards in March to keep spending while student and new-car loans shot up as the value of outstanding consumer credit jumped at the fastest rate since late 2001, data from the Federal Reserve showed on Monday.

Total consumer credit grew by $21.36 billion - more than twice the $9.8 billion rise that Wall Street economists surveyed by Reuters had forecast. That followed a revised $9.27 billion increase in outstanding credit in February.

Analysts expressed some reservations whether the date reliably signaled a real pickup in demand, something that would normally fuel stronger growth, or just a need to rely more on credit in an economy generating anemic job growth.

"The optimistic read is that consumers' improved outlook on the economy and employment prospects led them to feel comfortable spending on credit, while a more downbeat interpretation is that credit is needed for consumers to keep up," Nomura Global Economics said in a note afterward.

The March rise in consumer credit was the strongest for any month since November 2001 when it soared by $28 billion. That was shortly after the September 11, 2001 attacks when big automakers were offering zero-percent financing and other incentives to lure consumers back to their showrooms.

New-car sales and production were a key influence on the 2.2 percent annual rate of economic growth posted during the first three months this year. The government estimated that about half of that growth came from increased new car production.

The March figures showed consumers once again expanding their credit card use after two months in which they had paid this debt. So-called revolving, or credit-card, debt rose $5.18 billion after declining by $2.35 billion in February and $2.95 billion in January.

Paul Edelstein, an economist with IHS Global Insight in Lexington, Massachusetts, said it might mean that consumers have now paid down debt that they accumulated over the holiday season and were ready and able to take on more, but cautioned that was not a certainty.

"The bearish view is that with income growth anemic, households needed to use their credit cards to pay for higher gasoline prices in March," he added.

The main increase in March consumer credit was concentrated in non-revolving credit, a category that includes student and car loans. It climbed by $16.17 billion following a revised $11.62-billion gain in February.

Concern about student loan levels has increased in an environment where newly graduating students face difficulty finding a job and keeping up with loan payments.

Congress is currently considering how to prevent a low interest rate for student loans from doubling on July 1 and is expected to find a way to do so, if only to avoid irritating young voters ahead of November's presidential elections.

A scarcity of job opportunities has led more people to seek retraining at colleges and universities which has also contributed to loan demand and growth in outstanding credit.

"We expect that student loan growth will continue to push the level of consumer credit outstanding higher, and we look for revolving credit to expand as banks become more willing to lend," Barclays Bank PLC said in a statement.

Last week, the Fed said in its latest report on bank lending standards that bankers had become more willing to lend and that demand for business loans had increased in the first three months of this year.

That was taken as a hopeful sign for expansion because credit standards had tightened sharply after the 2007-09 recession and any loosening of standards could indicate an easier flow of credit that is vital to fuel growth.

U.S. consumer credit expanded far more than expected in May, a time when the broader economy seemed to cool.

Consumer credit grew by the most in five months, rising by a seasonally adjusted $17.1 billion to $2.6 trillion, Federal Reserve data shows this afternoon. Credit increased at an annualized 8.3% rate, the best pace since last December’s 9.3%. Economists had expected credit to expand by only $7.8 billion.

Growth in borrowing suggests Americans sought financing for cars and other large items, as well as loans for education, in a period where global fears and grim readings on the U.S. economy weighed their minds. Consider that the pickup came in the same month where economists speculated about the impending insolvency of the eurozone, and U.S. job growth slowed to 77,000.

Some observers, though, point to May’s expansion as evidence that consumers turned to credit because wage growth isn’t keeping up with expenses. Revolving credit, which includes credit-card spending, rose by $8 million, the largest one-month surge since November 2007. Continuing spikes in revolving credit would illustrate the need to use debt in place of income, says IHS economist Paul Edelstein. (And chalk up good months for credit-card companies like Visa and Mastercard.)

Meanwhile, in May, nonrevolving debt—loans for education loans and big-ticket purchases—climbed by $9.1 billion. The large majority of that increase came from federal government loans, mainly used for schooling, which rose by $6.2 billion.

Consumers’ willingness to seek long-term debt can be a boost to car companies such as Ford and General Motors and other businesses selling mostly large items. In all, consumer spending is the key driver of economic growth, making up some 70% of all activity in the U.S. It’s been restrained in past months by the weak job growth and worries about Europe.

Today’s report does not show any data on mortgages or other real estate loans.

A combination of higher prices for new cars and relatively low rates for auto loans means Americans are borrowing a record amount to pay for their new rides.

According to Experian Automotive, which tracks millions of auto loans written each quarter, the average amount borrowed by car buyers last quarter climbed above $27,000 for the first time ever.

"It's not surprising buyers are borrowing more," said Melinda Zabritski, Experian's senior director of automotive credit. "If you look at the most popular segments, they are full-size pickups and SUVs. It's hard to find one of those models new and fully loaded for under $30,000."

According to Experian, the average auto loan in fourth quarter 2013 was $27,430—an increase of $739 compared with the same period of 2012. The average used car loan was $345 higher, coming in at $17,974.

Those with non-prime credit ratings—or credit scores between 620 and 679—had the highest average auto loan. For these borrowers, the average new car loan rose more than $1,500, to a new high of $29,385.

And as their loans rise, keeping the monthly payment as low as possible has become more of a challenge—even as car buyers stretch their loans over longer periods of time. According to Experian, the average monthly payment for a new car auto loan rose $11 to $471 in the fourth quarter; the average monthly payment for a used car loan edged $4 higher, to $352.

Not surprisingly, those with subprime credit ratings—credit scores between 550 and 619—had the highest average monthly payment, of $499.

"I expect that monthly payment to continue rising and go above $500," Zabritski said. "There's always a tipping point where buyers say, 'I can't pay that much every month.' So far, we haven't seen the flashing lights go off indicating buyers are at a tipping point."

The payments are rising despite an increasing number of car buyers opting to stretch their loans over six or seven years. According to Experian, a record 20 percent of all new car auto loans in the fourth quarter were more than six years in length.

Overall, the average auto loan is scheduled to last five years and three months—but that could be rising.

J.D. Power said last week that February was on track to have one-third of new car auto loans last at least six years.

Bigger auto loans shouldn't come as a surprise, given the average transaction price—or the amount buyers are paying at dealerships—climbed 1.9 percent to $32,160 in February, according to Kelley Blue Book. It's the second straight month transaction prices came in above $32,000, as car buyers are adding navigation systems, in-car connectivity and infotainment systems to their vehicles.

Within the industry, automakers such as Ford and Volkswagen have average transaction prices higher than $34,000. But for February, the highest average transaction price among the largest mass automakers was General Motors, where the average model sold at dealerships for $35,380.