US consumers cut back on credit card use in March, borrow more to attend school and buy cars

WASHINGTON – Americans cut back on using their credit cards in March, suggesting many were reluctant to take on high-interest debt to make purchases.

The Federal Reserve says consumer borrowing rose just $8 billion in March from February to a seasonally adjusted $2.81 trillion, the smallest increase in eight months.

The gain was driven entirely by more loans to attend school and buy cars. The category that measures those loans increased $9.7 billion.

A measure of credit card debt fell $1.7 billion and remains 17.2 per cent below its peak set in June 2008.

Since the recession, consumers have been more cautious about using credit cards. Economists believe consumers will stay cautious this year, in part because of an increase in Social Security taxes that has reduced tax-home pay for most Americans.