Consumer borrowing rose higher than expected in May as Americans charged away on their credit cards, according to the Federal Reserve's G.19 report released Monday.
Credit cards and other revolving credit drove the increase, rising at a 9.3% annual rate in May. It was a sharp jump from April, when revolving credit rose at just a 1.1% annual rate, the Fed said. The pace was the highest since May 2012. The increase in revolving credit probably reflected rising consumer confidence and low interest rates.
Total consumer credit debt, which does not include mortgages, rose by $19.6 billion in May to a record $2.8 trillion. Analysts had projected an increase of approximately $12.5 billion. Total installment credit, including auto and student loans, increased at an 8.3% annual rate in May, the fastest pace in a year.
The upward trend might not continue as interest rates have risen in recent weeks as financial markets anticipate the end of the Federal Reserve's bond-buying stimulus program, which helped push long-term rates down.
Auto loans and other non-revolving credit increased at a 7.9% annual rate in May, compared with 6.2% in April.