Consumer Credit Rises $6.09 Billion In December, First Revolving Credit Increase Since August 2008

Tyler Durden's picture

After it was already confirmed that December was a subpar month for US retailers (whether snow can be blamed or not is irrelevant), and less money than expected was spent (it's ok, we no longer need the US consumer to lead the economy - the Fed is buying all the debt, it can also buy everything else), we finally get our first glimpse as to how even the week consumer performance in December was funded. Two words: "Charge it." Total US Consumer Debt in December rose by $6.09 billion December, on expectations of a $2.4 billion increase (and $4 billion higher than November's revised $2.022 billion). Yet what is most notable is that while Non-revolving loans increased by $3.8 billion (the lowest in the past 4 months), revolving loans posted their first increase since August 2008, increasing by $2.3 billion. Is the US consumer so tapped out that it is time to go to the credit card once again? And if so, does this mean that the drop off in excess reserves by over $180 billion compared to where they should be has been due to consumer lending. If that is the case, we may be far closer to Bernanke losing control of the trillions in excess reserves (and a surge in "velocity" or however one calls this archaic construct) than we had expected previously.

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HungrySeagull's picture

Finally the unemployed, uncounted and homeless have finally recieved thier Ipods under the bridges and now have decided that since all benefits have run out for good, they probably decided screw it, charge it! I will eat and feed my family tonight.


The other side of the coin might be those who have sat on credit cards so long watching metals like silver zoom upwards. They may have decided charge it! and take possession of the Silver to sit on it a while.


There is profit in them there Credit Cards, interest rates be damned.

Financial_Guardian_Angel's picture

This is nothing more than the seasonal change typical every Jan/Feb.

Credit card usage goes up, and credit scores go down for a few months until people pay off the Christmas debt.

If this persists until April or May, then we may have something here...

Pegasus Muse's picture

"There is profit in them there Credit Cards, interest rates be damned."

JPMorgan/Chase has a credit card with an introductory 0% interest for 18 months.  It's their  Slate (Visa) card.  There is something particularly satisfying about having JPM finance my Ag purchase.  

I will pay off the balance in full right before the grace period ends .... if JPM is still in business. 

Cognitive Dissonance's picture

People just don't want to admit that Bernanke is a serial black out drinker and we're all passengers in the hearse he's driving.

God help us all. He's headed for the cliff.

Nacho.Libre's picture

Well, when I go, I want to go peacefully in my sleep, like my grandfather, not screaming and yelling as the car went careening off a cliff, like his passengers.

Cognitive Dissonance's picture

We are ALL passengers in his car.

The only difference is that some of us had the good sense to sit way in the back so we can use all those obese bodies piled in front as some sort of a cushion when we decelerate from 100 MPH to 0 MPH in 100 microseconds.

It's not the fall that's going to kill us, it's the sudden stop.

william the bastard's picture

On a long enough timeline the survival rate for everyone drops to zero.

Treason Season's picture

On a long enough bus the survival rate for some is better than others. 

Nacho.Libre's picture

We could always just jump out of the moving vehicle and tuck and roll.  Sure, we'd get a bit scraped upped and bruised, but at least we wouldn't go plunging off the cliff. 

SayTabserb's picture

You've already figured it out, The Bernank will just buy up the bank receivables and add them to the stash. The Bernank can play whack-a-mole until the Fed owns everything since only Peak Oil, which might limit the number of toner cartridges which can be manufactured, can slow him down, and if he has to, he'll take up printing dollar bills by hand.

SheepDog-One's picture

People have said 'screw it, Im not paying my mortgage and Im going to rack up new credit cards till the wheels fall off, screw next month Im eating this month'.

Every week I get about 5 new Chase or other credit card offers.

Dr. Richard Head's picture

HA to the credit card offers. I defaulted and settled for pennies on the dollar with JPM (8-9 months ago) and they are sending me credit card offers again.  LMAO

william the bastard's picture

Your nick name is not meat for nuthin

Dr. Richard Head's picture

Meat for nothing indeed.  One of my exgirlfriends used to call it Mr. Meat.

Misean's picture

Probably just first time users of the new food stamp cards getting confused and whipping out the wrong card in the check out line. It'll get sorted presently.

LongSoupLine's picture

the cycle of failure continues

docj's picture

One last hit off the pipe.

Miss Expectations's picture

What can I say?  Yes, we can (fool most of the people, most of the time).

cosmictrainwreck's picture

and this startling headline means....exactly what?

buzzsaw99's picture

Buy V, BTFD. Buy junk bonds. That is all. [/not serious advice]

plocequ1's picture

It and other bad news means.. BTFD

Mike2756's picture

Amount financed for auto purchases is still declining, bigger downpayments or cheaper cars?

HungrySeagull's picture

$50,000 cream puffs rot.

$2,000 dollar beater restored with parts from junker yard runs for the next ten years.

I have two older vehicles and intend not to buy a new car for at least 5 more years.

Encroaching Darkness's picture

Nothing more than a few Christmas presents going on the card for a month or two, only for convenience.....

Only for a month or two.... I hope.

apberusdisvet's picture

Add that to the bubble-icious student loan situation and the REALLY poor will be a vast majority within a year; when people are hungry and homeless, they will follow willingly.  Hmmm.  I wonder what the real end game is?

HungrySeagull's picture

A student loan that cannot be discharged except by repaying. You will need to either die and have the life insurance pay it off or otherwise discharge it to paupers burial.


If millions fail to repay on time every month (no job, no money, no phone to be hounded with etc.) then the enormous weight of the loans are gonna hurt coming down.

kentfinance's picture

A turkey and a few presents for the kids, x300 million people. no surprise.

SheepDog-One's picture

Right, some trip charges, a few presents for Christmas, of course an IPhone on the credit card, and thats all she wrote.

Silverhog's picture

Well, my balance on Visa is largest in years. We had to use it to pay bills, not the beginning of a good story. I'm sure many others are forced to do the same.

HungrySeagull's picture

I ran a balance buying armor, weapons, ammunitions parts for the weapons and training classes along with fees for auto repairs, food etc.

The previous winterstorm I charged 300 dollars for two chains sets to be delivered by air for one vehicle and the shipping was 50 dollars. Overnight was 1000 dollars.


OTOH, the energy bill for electric and nat gas for last month was maybe 65 dollars total if that. I am literally pouring hundreds of dollars into the credit card each month and have not been charged interest yet.


Once the credit card is paid off, then there isnt anything else to do except retire the student loan in a year or two.


Then no more debt. All cash and a wheelbarrow buys a loaf of bread and milk by then.

AnarchoCapitalist's picture

I have received a large amount of 0% APR offers over the last 6 months.


A scenario that makes more sense, is that the average American is opening up another line of credit with a 0% intro APR and transferring his previous credit balance to the new card. This would create a net increase in credit while allowing for weak consumer sales numbers.

docj's picture

I survived 4-years of graduate school (1996-9) doing precisely that.  The balances got a little bigger with each transfer, but in 3-plus years I never paid a penny of interest.

Had to pay the piper eventually, though.  And boy, did that suck!

HungrySeagull's picture

We grabbed a 9 month 0% card from Chase some years ago, transferred something like 15,000 dollars off a 22% card and had it paid off in 7 months flat.

Damned if we never heard from Chase or anyone else ever again. Chase did not earn one red penny carrying 15,000 dollars.

AnAnonymous's picture

Wonderful US. Now US citizens are offered 0pc loans to sweep their 20pc loans out.

Once a thief...

HungrySeagull's picture

Ah yes. But when you have to pay 230 for interest and about.. 140 for principal pay down at 22% or whatever the hell it was back then while your money pit of a house and crappy swipe the card because we have no cash life style adds a few more dollars each month to the minimum... You are a slave to the credit card company.


Chase showed up they did warn us up front that if we miss even one payment or still have a balance after 9 months interest becomes 39.9 apr and we worked 5 jobs and ate oat meal and PBJ for 6 months to get rid of it.


Never again. To this day I cannot stand Peanut Butter or Jelly.'s picture

Interesting thing happend recently that had me take a bit of a step back.....some kid started playing with my kids at my house on Saturday....He had a cell phone and my kids started complaining that they don't have one...I said "I don't want to pay for your cell phones"......then the new kid said "Your not on food stamps?"  And I said "NO"....then my kids said "Whats food stamps?"..... to which the new kid said "They get you free food and allow you to get free cell phones" I guess people on food stamps can some how get free cell phones?  I am sure the kid isn't making it up.  Cell phones are a right? Why do I even try to fight the good fight? 

Rogerwilco's picture

Yeah, the bummicans who lay around in the parks on sunny days smoking dope and drinking all have a phone. Social services hands them out and pays for the air time so these fine citizens won't miss a call from potential employers -- LOL.

But hey, they're not smart phones, at least not yet...

Dr. Richard Head's picture

One of my daughter's friends recently came over to our home to visit my daughter.  This friend's family lives in a trailer home, is constantly shopping, on food stamps, and their ten year old daughter has a cell phone. 

I guess this is where this

comes into play. 

SafeLink Wireless is a government supported program
that provides a free cell phone and airtime each
month for income-eligible customers. Learn More

Fuck that bullshit.'s picture

This is amazing to me...why stop at a cell phone....what if they miss an email from a potential employer or a rich Nigerian General needing a place to deposite 8M USD?  How long until they get laptops with free internet???  Who the fuck knew about this?  I bet the people on free food and free cell phones don't want it getting out...

Dr. Richard Head's picture

It cracks me up really.  I have a neighbor who's wife has been on umeployment for over a year (not looking for a job either) and her husband would mock me all of the time on how I gave the credit card compan ies the finger.  Now that he has be called to court by a credit card company he wants to know how I got the credit card companies to settle.  Fuck him.  Go it alone baby, go it alone.

HungrySeagull's picture

It is bullshit. You would be surprised at what mountains of bullshit to behold as you cross one path of trial and tribulations in your financial life while others lounge around on easy beach living on nothing except sunshine and hormone starved women.

cramers_tears's picture

Ya'mon.  Me drinkin' an' smokin' da ganj means da gubment got gib me da phone plan, mon. Iya need get me ganj calls.  Kinda lahk dem bank'r monees but for me ganj calls nstead. If da bank'rs get der free, me ganj calls got be free too, mon.  Ahyree, - whatacuntree, ef yer poor ganjer or da rich banker da gubment giv u free!  Da US streets - dem lined wi'gold, surree!

MachoMan's picture

My wife, as a mental health professional, has to go into homes of a large number of people.  The vast majority of her clientele are indigents and on governmental assistance.  Virtually all of those on assistance have smartphones and a few even have multiple flat screen televisions...

Of course, her actions are generally thwarted as they try and avoid her like the plague.  One of the issues is that if they get more mentally stable, etc., then often times their disability checks or other forms of assistance go out the window.  Further, if she clears them, then they no longer get a ridiculous amount of prescription medications (xanex, etc.).  In other words, the system is set up to incentivize them to remain in their socioeconomic wonderland.

No, obviously bums do not have iphones...  but, I'm not sure there are 43 million plus people living under bridges either...

HungrySeagull's picture

I bought a flat screen for 200 out of a pawn shop about 6 hours after it was placed on the shelf. It had everything and less than a year old.

Asked the pawn owner why that thing got in there, he said that the previous owner needed a tank of gas to get some beer (Dry county) so he pawned it.

I own it now. Retail in that time for the same model was about 1000 dollars at walmart.

Ludwig Van's picture


FLUSA said, "Why do I even try to fight the good fight?"

1) Because you have to live with yourself (a clean conscience is a dear prize); and 2) because your kids are watching and listening to everything you do and say.

It's called *the good fight,* not *the easy fight* -- as you know.



juujuuuujj's picture

This ties in very well with another ZeroHedge article about how debtors will go out with a bang, and not a whimper, because they're hyperleveraging. This is a great lecture by prof. Steve Keen, which includes an explanation of this short period of optimism after the first wave of debt deflation (which is then followed by an even bigger deflation):