Credit cards push US consumer borrowing up $14.8 billion

WASHINGTON - Consumers increased their borrowing in December, with credit cards rising at the fastest pace in eight months. It could be a sign that consumer spending will accelerate as strong jobs gains give shoppers more confidence about taking on debt.

Consumer borrowing expanded by $14.8 billion in December, pushing consumer debt to a record $3.31 trillion, the Federal Reserve reported Friday. In November, borrowing had climbed by $13.5 billion.

The December rise included a $5.8 billion jump in the category that includes credit cards, marking the biggest gain since April. The result followed a $945 million drop in the category in November.

Consumer borrowing in the category that includes auto loans and student loans also rose in December, climbing $9 billion after a $14.4 billion increase in November.

Total debt is up 6.9 percent in the past year. The category covering auto and student loans is up 8.2 percent, while the credit card category has risen just 3.5 percent.

The auto and student loan category has been growing at the fastest rate since the Great Recession of 2007-2009. That partly reflects the fact that many workers who lost jobs during the downturn decided to take out loans to go back to school. Some students also stayed there longer, acquiring more student debt, because they had trouble landing jobs.

In contrast, consumers aren't using credit cards as much as they used to before the recession. Many economists believe this indicates greater caution about taking on debt to finance consumer spending. But with robust job growth over the past year, consumers are likely to borrow more and fuel consumer spending, which accounts for 70 percent of economic activity.

The Fed's monthly report on consumer credit does not cover mortgages, home equity loans or other types of loans secured by real estate.