AP Economics Writer
WASHINGTON (AP) – Americans swiped their credit cards more often in October and borrowed more to attend school and buy cars. The increases drove U.S. consumer debt to an all-time high.
The Federal Reserve said Friday that consumers increased their borrowing by $14.2 billion in October from September. Total borrowing rose to a record $2.75 trillion.
Borrowing in the category that covers autos and student loans increased by $10.8 billion. Borrowing on credit cards rose by $3.4 billion, only the second monthly increase in the past five months.
The strong rise in borrowing came in a month when Americans cut back on consumer spending, reflecting in part disruptions from Superstorm Sandy.
Many consumers may also have scaled back because of fears about the “fiscal cliff.” That’s the name for automatic tax increases and spending cuts that will take effect in January if Congress and the Obama administration fail to strike a budget deal by then.
Consumer spending drives roughly 70 percent of economic activity.
Economists think that it could bounce back in November. But the underlying trend remains weak because with unemployment remaining high, households don’t have the incomes to spend.
Many consumers have been reluctant to build up credit card debt, which typically carries steeper interest rates than other loans.
Credit card usage has fallen sharply since the 2008 credit crisis. Four years ago, Americans had $1.03 trillion in credit card debt, an all-time high. In October, that figure was 17 percent lower.
During the same period, student loan debt has increased dramatically. The category that includes auto and student loans is 22 percent higher than in July 2008. That reflects in part the fact that many Americans who have lost jobs decided to go back to school to get training for new careers.
(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
- 6 cool ways teachers are using technology in the classroom
- Emerging tech jobs in Phoenix and how to get one in 2017
- 4 top treatments athletes use for pain
- Emergency! What to do when bathrooms flood
- Operation Santa Claus needs holiday help
- This college bowl season is likely to be epic
- Arizona kids in crisis: How you can help
- 11 holiday classics for the ultimate movie marathon
- 2016 college football rivalry games you simply can't miss
- New treatment offers hope for migraine sufferers
- 11 stadiums to watch your favorite football team
- Shopping for a TV? Best models for 2016
- The new beer pairing guide for holiday foods
- Avoid this holiday plumbing disaster in your home
- 7 tips to avoid holiday weight gain
- New treatments mean better prostate cancer survival rates
- 5 of the scariest things found in drains
- 6 tips to create the best family movie night
- New bone marrow procedure holds promise for healing pain
- The best places to celebrate Fall in Phoenix
- Infamous athletes who did the most time for their crimes
- Diet, exercise and aspirin: 3 tools to fight colon cancer
- 2016 baseball highlights, bloopers and blunders
- See how CFOs really feel about business in the Valley
- The best television shows on the internet
- The 5 worst things you could do for your roof
- 6 coolest things brewing in Arizona
- The virus that keeps head and neck cancers on the rise
- State Fair ‘Kid Reporter’ has all the angles covered
- 4 important things to know about timeshare maintenance fees