Feb 7, 2014 2 min read

WASHINGTON (AP) – Consumers boosted their borrowing in December by the largest amount in 10 months as demand for auto, student and credit card loans showed big gains.

Consumer borrowing rose $18.8 billion in December, the biggest increase since February, the Federal Reserve reported Friday. The category that includes auto and student loans increased the most, rising $13.8 billion. Credit card debt, which has been lagging, rose by $5 billion. That was the largest jump since May.

The big increase pushed total borrowing to a fresh record of $3.1 trillion. Gains in borrowing are viewed as an encouraging sign consumers are more confident and willing to take on more debt to finance consumer spending, which accounts for 70 percent of economic activity.

Consumers increased borrowing by $12.4 billion in November.

Over the past year, consumers have become more confident and are willing to take on debt. Most of those gains come in the category that covers auto and student loans. Credit card borrowing has been rising more slowly.

Borrowing on credit cards plunged after the Great Recession as financial institutions tightened lending standards and households became more cautious about taking on high-interest debt at a time when millions of people were losing their jobs.

Even with recent gains, credit card debt is still 15.7 percent below its peak above $1 trillion reached in July 2008. Credit card debt in December stood at $861.9 billion, up just 1.9 percent from a year ago.

The measure of auto loans and student loans in December stood at $2.24 trillion, up 8 percent from a year ago. It increased 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 is 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.