Reports have been coming out all year warning about rising household debt. The good news is that Israel maintains a household debt, excluding mortgages, that is lower than the global average. Household debt accounts for 14% of Israel’s GDP.

Compared to the United States, which is at 25%, household debt doesn’t seem like much of a concern.

But that doesn’t paint a clear picture of what’s happening in Israel by any means.

Bank of Israel shows that between 2011 and 2016, household credit rose by nearly 50%. Credit is easier to obtain, and when this happens, people spend more. There’s no reason to wait for a new phone or spend responsibly when you have credit at your fingertips.

Lending by credit card companies is up 50% – 60%.

Are the warning bells signaling yet?

Rising consumer debt may not seem like much based off of the statistics above, but it is a concern. The Finance Ministry attributes Israel’s economic growth to borrowed money. Borrowing is rising at a rate that is close to what the United States experienced before the subprime crisis.

Experts are calling on the Bank of Israel to take steps to curb loan borrowing.

Rising consumer debt should worry all Israelis.

Household credit, when including mortgages, grew 7.5% in 2016. If you don’t account for mortgages, this rate is 9%. Consumer debt is rising quickly, and while we’re not at dangerous levels yet, it is a cause for concern.

The issue has a lot to do with reforms that are being put in place to increase competition. When consumer credit rises, one thing happens: borrowing is encouraged. Competition will lead to a greater push to lure in consumers to take out more credit. Rates may start to fall, but debt is debt. The consumer debt level in Israel is up 23% in the past three years.

Low unemployment rates are helping mask the problem since borrowers are still able to pay their debts.

Personal bankruptcy applications are on the rise, according Meretz leader Zehava Galon. Galon states that applications are up 75%. She says that it’s time to correct the issue now, or “it will blow up in our faces in a few years.”

Buying habits are also shifting. Consumers are spending more money on durables, or furniture, jewelry, electronics and cars. Household spending on durables is now 10%. Non-durable items are also being purchased, but at a slower rate.

There is a plus, or maybe an even bigger concern, depending on what is causing the rise in the bottom 10% of earners spending more.

The bottom 10% of earners increased car ownership to 33%, up from 23%. This may mean that the discrepancy in income between the lower and higher owners is shrinking. Wage gaps shrinking are a good thing for the economy, but it may also mean that people are frivolously spending on items they may not be able to afford for long.

Rising debt is a concern for every country, and while still at acceptable levels, if the rising debt continues in Israel, we may face a crisis in the future.