Emboldened by an improved economy, Americans are whipping out their credit cards again. A report issued this fall shows that the number of active credit accounts, 314 million, has crept back up to levels not seen since the start of the Great Recession in December 2007.

Some economists say this is a good sign, indicative of consumers’ improved financial health. But another marker — the number of borrowers with sketchy credit scores — also has increased. This means lenders are more willing to extend credit to those who have had trouble managing their money in the past. This is not necessarily something to cheer.

The September report by the American Banking Association showed the number of new credit-card accounts increased 14 percent over the same period in 2014. The group examined the accounts in three categories: super-prime, prime and subprime. It found that while most new accounts belong to people with excellent or good credit scores, the 20 million accounts opened by subprime consumers (those with FICO scores below 680) are a 28 percent jump from the previous year.

The new accounts bring the total number of subprime accounts to 60 million, a threshold not crossed in three years. These accounts have significantly lower lines of credit than those held by people with excellent credit scores — averaging $2,332 compared with $8,910 — but their available credit will increase if card holders manage them responsibly.

ABA economist James Chessen said the expansion of credit benefits both people with pocked credit records as well as millennials with no credit history and asserts that “card issuers have responsibly expanded access to credit cards in a manner that benefits both consumers and the broader economy.”

Maybe. But if the best predictor of future behavior is the past, a ready availability of subprime credit is good in the short term but not necessarily the long. And it’s worth remembering that the true sign of financial health is not available credit but money in the bank.

Editorial by the Pittsburgh Post-Gazette

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