WASHINGTON (AP) — Consumers increased their borrowing in March by the largest amount in more than a year, using their credit cards and taking out more auto and student loans.
Consumer borrowing increased $17.5 billion in March, up from a gain of $13 billion in February, the Federal Reserve reported Wednesday. It was the biggest monthly increase since a $19.3 billion advance in February 2013.
The category that includes auto and student loans rose $16.4 billion while the category that covers credit card borrowing increased $1.1 billion.
The overall increase in consumer debt pushed total borrowing to a record $3.14 trillion.
Gains in borrowing are seen as an encouraging sign that people are more confident and willing to take on debt.
Increased household borrowing can fuel higher consumer spending, which accounts for 70 percent of economic activity.
The rise in credit card borrowing in March followed a sizable decline of $2.7 billion in February and likely reflected the pickup in retail sales in March.
The gain in borrowing for autos and student loans had also been expected given that auto sales posted a solid gain in March.
Borrowing on credit cards plunged during the recession as consumers tried to lower their debt during a period when millions of people were losing their jobs and many people still working were worried about the threat of layoffs.
Credit card borrowing started rising again in 2011 but the increases have lagged far behind the category that covers auto and student loans. Economists said that many households have become more cautious about taking on high-interest debt.
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