Consumer Borrowing Spikes in March

Washington, DC, May 8, 2008--Stressed consumers are turning to increasingly turning to their credit cards.

Consumer borrowing rose in March at the fastest pace in four months, more than double the increase of the previous month, the Federal Reserve reported Wednesday.

The Federal Reserve said consumers increased their borrowing at an annual rate of 7.2 percent, compared with a 3.1 percent rate of increase in February.

The gain was much larger than economists had expected. The increase in consumer debt totaled $15.3 billion at an annual rate in March, much bigger than the $6 billion increase that economists had been expecting.

Consumers have been moving to put more of their purchases on their credit cards as banks have tightened lending standards for home equity loans in response to the deepening credit crisis.

The Fed's measure of consumer borrowing, which does not include any debt secured by real estate such as mortgages or home equity loans, stood at a record $2.558 trillion in March.