Maxing out credit cards is a positive sign?

Obviously, I’m not an economist. And I’ve often wondered how anyone can intelligently comment upon global affairs, without a working knowledge of it, but I prod along anyway because it’s cathartic.

This is an example of the seemingly contrary information that as a lifelong consumer I find worrisome. In the past couple of days there’ve been numerous reports that consumer confidence was sharply and unexpectedly down in November (which you can view here).

Today, there are reports like this one, “Consumer Spending Stronger Than Expected“, which quotes Kurt Karl, “head of economic research at Swiss Re in New York,” who views this increase in online credit card spending as a positive indicator of a shopping season that’s “looking pretty solid.”

In that same article:

“The saving rate, the portion of disposable income socked away, fell to 0.2 percent, the lowest since October 2001.

Adjusted for inflation, personal spending climbed a smaller 0.3 percent, a slowdown from September’s 0.5 percent advance but a stronger increase than many economists had forecast.”

If you ask me, the non-economist, this suggests that a lot of people who have nothing socked away for Xmas went on binge spending sprees, with their credit cards, over the Thanksgiving holiday.

How can anyone judge the shopping season before it counts, after the bills come due, and the ability to pay them is analysed? My instinct tells me that this spending, along with lowered savings, is a sign of bad news to come.