WASHINGTON (AP) - Americans borrowed more money in July than any other month in more than three years. But they cut back on using their credit cards.
Consumer borrowing rose nearly $12 billion in July, the Federal Reserve said Thursday. Greater demand for school and auto loans fueled the increase. A category that measures credit card use fell in July after large increases in May and June.
Total consumer borrowing increased to a seasonally adjusted annual level of $2.45 trillion. That's barely 2 percent above the four-year low reached in September.
The increase in loans was largely because of a pickup in auto sales, said Troy Davig, senior U.S. economist at Barclays Capital. The March 11 earthquake in Japan caused a global parts shortage that left many auto dealers without popular models this spring. The supply chain disruptions have eased in recent months.
The category that measures auto loans rose in July by the most in more than six years.
Borrowing is usually a sign of confidence in the economy. Consumers tend to take on more debt when they feel wealthier. But an increase in credit card use can be a sign that people have fallen on harder times.