Consumer Borrowing Surges to $15.9 Billion Record

David Tulis/AP WASHINGTON -- U.S. consumers increased their borrowing in September with gains in credit card debt, and auto and student loans. The Federal Reserve says overall borrowing rose $15.9 billion following a $14 billion gain in August and a $22.8 billion July increase. The gains have pushed total consumer debt to a record level of $3.27 trillion. The category that includes credit cards showed a $1.44 billion increase in September after having dropped by $201 million the previous month. The category that covers auto loans and student loans increased $14.48 billion after a $14.23 billion increase in August. Rising levels of consumer borrowing coupled with strong employment growth are viewed as good signs that consumers are confident about taking on more debt to boost purchases. The September increase in total borrowing put it 5.9 percent above a year ago. Auto and student loans are up 7.3 percent from a year ago while credit card debt has risen a much smaller 2 percent. The large increase in student debt has raised concerns that young Americans are being saddled with student loans that will keep them from buying homes or spending as previous generations have after college. Student loans have soared since the recession ended, topping $1.1 trillion in the second quarter of this year, according to data from the New York Federal Reserve. That's up from $700 billion in 2009 and in part a reflection of the number of people who either lost jobs or couldn't get a job after graduation and decided to go back to school. The New York Fed reported that demand for auto loans reached the highest level in eight years this spring with more people with checkered credit histories obtaining the loans. That has raised worries about the potential for defaults down the road. The Federal Reserve's monthly credit report doesn't cover mortgages or any other loans that are backed by real estate. Yes they can. The CARD Act did get rid of the most outrageous abuse: they can no longer increase the interest rate on existing balances unless you go 60 days past due.