Consumers were brisk borrowers in May as free-financing deals and deep discounts motivated them to use their charge cards more freely.
The Federal Reserve reported Tuesday that consumer credit rose by a seasonally adjusted $7.3-billion from April, an annual rate of 5 percent.
That followed a $7.9-billion borrowing increase in April from March, or a 5.4 percent growth rate, a robust pace but not as strong as the Fed had estimated a month ago.
May's increase in borrowing was larger than the $5-billion advance economists had forecast and pushed up total consumer debt to $1.76-trillion.
Demand for revolving debt, such as credit cards, went up in May by $3.1-billion, or at a 5.3 percent annual rate. That compared with a 2 percent growth rate in April and a $1.2-billion increase.
"Rebates and heavily discounted merchandise were simply too good for consumers to refuse," said economist Richard Yamarone of Argus Research Corp.
For nonrevolving credit, which includes loans for new cars and vacations, borrowing rose by $4.2-billion, or a 4.9 percent rate in May. While that remained robust, it was down slightly from April's sizable $6.6-billion increase in nonrevolving credit, which represented a 7.8 percent growth rate.
The Fed's report includes credit card debt and loans for vehicles.