US Consumers Unexpectedly Paid Down Credit Card Debt In November Even As Student, Auto Loans Soared

One month after the burst in credit card usage, when in October revolving, i.e., credit card debt soared by $7.9BN or the most since July, in November US consumers hunkered down and just as the holiday spending was in full force, and unexpectedly repaid $2.4BN in credit card debt, the most since March, bringing the total credit card debt outstanding to $1.086 trillion, just shy of the record hit in October.

Offsetting this drop, was another surge in non-revolving debt, i.e., student and auto loans, which rose by $14.9BN, the biggest monthly increase in four months, and the second highest monthly increase since August 2018.

Combined, November’s total increase in consumer credit was $12.5BN, which was below October’s massive $19BN, and below the consensus estimate $16BN, entirely on the back of the unexpectedly drop in credit card debt.

Considering the strong end to the year for retail sales, especially online, we assume this was a one-off event, and in December any credit card “shrinkage” was more than offset with aggressive year-end “charging.” If not, then the US consumer may indeed be reaching the limits of their debt-funded spending euphoria.