Behind America's latest borrowing boom

With the lure of low interest rates and hefty discounts, Americans borrowed in record amounts in November.

Consumer credit rose a whopping $19.8 billion that month, to a seasonally adjusted $1.65 trillion, the Federal Reserve reported last week. Auto loans, which spiked due to the appeal of zero-interest-rate financing offers, was the main reason for the record one-month surge, but credit-card use and other loans also increased.

Consumer debt is now growing at an annual rate of 14.6 percent. Economists had expected borrowing to rise, but they predicted more modest increases of $3 billion to $4 billion. Instead, the dollar increase was the biggest since the Fed began record-keeping in 1943, and the percentage increase was the largest since November 1995.

Demand for nonrevolving credit, which includes cars and vacations, rose by $14.4 billion - on top of a $14.7 billion increase the month before. Demand for revolving credit, such as that used by credit cards, rose by $5.4 billion in November, or at an annual rate of 9.4 percent. In October, revolving credit had dropped $3.5 billion.

The Fed's report does not include loans backed by real estate, such as home mortgages or home-equity loans.