Consumers Run Up Credit Cards In July

American consumers resumed borrowing in July, tapping their credit cards and securing auto loans after taking a rest in the spring and early summer.

Consumer debt outstanding grew at a 6.4 percent annual rate to a seasonally adjusted $1.23 trillion, the Federal Reserve said Monday.

That was the biggest advance since April and well above lackluster gains at rates of 0.8 percent in June and 2.7 percent in May.

“The consumer has not zipped up his wallet,” said economist Samuel D. Kahan of A.S.K. Financial Research Ltd. of Chicago. “This tells us the consumer is optimistic about things. … Income is growing and people are comfortable. They don’t feel at all hampered in terms of spending.”

The report fit with other reports showing shoppers returning to department stores and auto showrooms after a spring spending lull that followed a winter spree.

Retail sales rose a healthy 0.6 percent in July and analysts predict a Commerce Department report due Friday will show a 0.7 percent gain in August.

Economists have nervously watched consumer credit levels as increasing numbers of Americans - more than a million a year - declare bankruptcy. But, given the low unemployment rate and recent reasonable income gains, the finances of most households aren’t stretched too far, Kahan said.

Much of the July credit advance came in the revolving loan category, which is mostly credit cards. It rose at a 12.5 percent annual rate to a seasonally adjusted $521.9 billion, the fastest pace in five months, after rising at a 2.8 percent rate in June.