Credit Card Debt Suddenly Surges 18% As U.S. Consumers "Pre-Spend" Tax Relief Savings

With Republicans in Washington D.C. on the verge of passing their first major piece of legislation in the form of comprehensive tax cuts that will allow Americans across the income spectrum to keep a little more of their hard earned cash in 2018, it appears as though eager U.S. consumers may have already “pre-spent” their savings on their credit cards.

As the folks at Gluskin Sheff point out, 13-week annualized credit card balances in the U.S. have gone completely vertical in the last few months of 2017 which should make for some great Christmas gifts for little Johnny and Susie…gifts that will undoubtedly find themselves tucked away in a dark closet, never to be seen again, by mid January.

Of course, as we pointed out earlier this month, the latest Fed data revealed that total consumer credit rose by 6.5% Y/Y, rising to $3.802 trillion as of Oct 31. That number is more than double the rate of increase of US GDP or wage growth, making it clear just where America’s “purchasing power” comes from.

Finally, this was also the single biggest monthly increase in consumer credit since November 2016.

And while nonrevolving credit reached a fresh record high of $2.791 trillion, revolving – or credit card debt – is now back well over a trillion dollars or $1.011 trillion to be precise, and fast approaching the all time bubble high of $1.02 trillion hit in the summer of 2008.

So, what hot new Christmas gadget has Americans suddenly willing to max out their credit cards? Well, if Google search trends are any clue, it might not be a gadget, or anything tangible for that matter, at all…