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updated 2/7/2011 3:37:23 PM ET 2011-02-07T20:37:23

Americans are putting more money on their credit cards after two years of cutting back, helping fuel the third straight monthly increase in consumer borrowing.

The Federal Reserve reported Monday that consumers increased their borrowing by $6.1 billion in December to a seasonally adjusted annual rate of $2.41 trillion. That represented a gain of 3 percent.

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Borrowing in the category that includes credit cards rose 3.5 percent, the first advance after a record 27 straight monthly declines. Borrowing on auto loans increased 2.8 percent.

Even with the December gains, consumer borrowing is just 0.7 percent higher than the more than three-year low hit in September. It is 6.6 percent below the high set in July 2008.

Households began borrowing less and saving more after the country fell into a recession in December 2007. The decline in borrowing has dampened consumer spending, which accounts for 70 percent of total economic activity.

Economists believe consumers this year will gradually borrow more money. However, they don't expect Americans will borrow at the pace seen in the middle of the last decade. Soaring home prices made households feel wealthier and encouraged them to borrow and spend.

Analysts had expected a rise in total borrowing in December, reflecting strength in auto loans. But they didn't anticipate a rise in credit card debt. Both auto sales and overall retail sales showed increases in December. Retailers closed out their best holiday shopping season in four years.

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Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.71%
$30K home equity loan FICO 5.26%
$75K home equity loan FICO 4.70%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.42%
Cash Back Cards 17.94%
17.94%
Rewards Cards 17.15%
17.14%
Source: Bankrate.com