Apr 7, 3:34 PM EDT

US consumer borrowing up $16.5 billion in February


AP Photo
AP Photo/Gene J. Puskar
Business Video

Multimedia
A district summary of the Beige Book
Measuring economic stress by county nationwide
Mall malaise: shoppers browse, but don't buy
Unemployment by the numbers
Family struggles with father's unemployment
Saying an affordable goodbye
Hard times hit small car dealer
Latest Economic News
How the Dow Jones industrial average fared

US stocks close higher for third day in a row

King and Bank of America are big market movers

US stocks rise, extending gains into third day

France targets welfare for big spending cuts

Yahoo, China news send US stocks higher at midday

Russian economy hit by Ukraine turmoil

Yahoo, PNC among early winners among US stocks

UK unemployment keeps falling amid recovery

China's growth slows to 7.4 percent in 1Q

Buy AP Photo Reprints

WASHINGTON (AP) -- Consumers increased their borrowing in February on autos and student loans by the largest amount in a year. But for a second straight month, they cut back on their credit card use.

Consumer borrowing climbed $16.5 billion in February, up from a $13.5 billion gain in January, the Federal Reserve reported Monday.

The category that includes credit cards fell $2.4 billion after a $241 million drop in January. But this decline was offset by an $18.9 billion increase in borrowing in the category that covers autos and student loans, the biggest one-month gain since February 2013.

The overall increase in consumer debt pushed total borrowing to a record $3.13 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 February decline in credit card borrowing marked the third decrease in the past four months. That continues a trend evident since the 2007-2009 Great Recession.

Borrowing on credit cards plunged during that 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.

Credit card debt in February was still 17.3 percent below its peak above $1 trillion reached in July 2008. Credit card debt stood at $854.2 billion in February, up just 0.5 percent from a year ago.

The measure of auto loans and student loans in January stood at $2.28 trillion, up 7.7 percent from a year ago. It has been up every month but one since May 2010.

A separate quarterly report on consumer credit done by the Federal Reserve Bank of New York shows that student loan debt has been the biggest driver of borrowing since the recession officially ended in June 2009.

The Fed's borrowing report tracks credit card debt, auto loans and student loans but not mortgages or home equity loans.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.