Business

Consumer debt rises to $2.75 trillion

WASHINGTON — Americans swiped their credit cards more often in October and borrowed more to attend school and buy cars.

The increases drove US consumer debt to a record high.

Advertisement

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.

Get Talking Points in your inbox:
An afternoon recap of the day’s most important business news, delivered weekdays.
Thank you for signing up! Sign up for more newsletters here

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 have also scaled back because of fears about the fiscal cliff. That is the term for automatic tax increases and spending cuts that will take effect Jan. 2 if Congress and the Obama administration fail to strike a budget deal by then.

Advertisement

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.

Loading comments...
Real journalists. Real journalism. Subscribe to The Boston Globe today.
You're reading  1 of 5 free articles.
Get UNLIMITED access for only 99¢ per week Subscribe Now >
You're reading1 of 5 free articles.Keep scrolling to see more articles recomended for you Subscribe now
We hope you've enjoyed your 5 free articles.
Continue reading by subscribing to Globe.com for just 99¢.
 Already a member? Log in Home
Subscriber Log In

We hope you've enjoyed your 5 free articles'

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week
Marketing image of BostonGlobe.com
Marketing image of BostonGlobe.com