Tight-fisted consumers still buying cars

Consumers borrowed more in January to purchase new cars but were once again frugal with their credit cards, offering a mixed sign of their confidence in the economy.

The Federal Reserve said Monday that total borrowing rose at an annual rate of $5 billion in January, or 2.5 percent, the fourth consecutive gain. Strong car sales drove the increase. The category that includes auto loans rose 6.9 percent.

Credit card debt fell 6.4 percent in January, the 28th decline in 29 months. Americans had increased their use of plastic in December for the first time since the financial crisis. But they cut back the following month, even though a Social Security tax cut is giving most households an extra $1,000 to $2,000 this year.

Combined, total consumer credit equaled $2.41 trillion, a slight 0.7 percent above a three-year low hit in September. Consumer borrowing is 6.6 percent below the high hit in July 2008.

Analysts predict consumers will borrow more in the months ahead, responding to the strengthening economy, a brighter outlook for jobs and the tax cut.