Americans slowed their borrowing in August and paid down credit cards. Federal Reserve data released Wednesday show consumer credit grew at a 1.9% annual rate. That is less than half of July's revised 4.1% pace and the slowest since May, PYMNTS reported.

In dollars, borrowing rose about $8.28 billion in August. Economists had expected $15 billion. July's gain was $17.74 billion, Newsquawk reported. Total consumer debt reached $5.197 trillion.

Credit cards drove the slowdown. Revolving credit, which is mostly card balances, shrank at a 4.2% annual rate. Balances fell to $1.352 trillion from $1.357 trillion. That pulled them back from a record set a month earlier. It was the steepest monthly drop in at least a year.

Card debt is costly. The average rate on card accounts that charge interest rose to 22.36% in the third quarter, up from 22.15%, PYMNTS reported. Rates on 60-month new-car loans rose to about 7.5% from about 7.1%.

Other loans kept growing. Nonrevolving credit, which includes car and student loans, rose at a 4.1% rate. Part of that was the calendar. Federal student loans grew to $1.622 trillion as schools started their fall terms.

One month does not make a trend. Card borrowing has swung a lot this year. It grew at a 10.5% pace in April, fell in May and rose 6% in June, PYMNTS noted.

What the drop means is unclear. It could show banks making it harder to borrow. Or it could show households choosing to borrow less. Newsquawk said the signal is "soft rather than decisive" unless late payments and store sales also weaken.

The next clues come from the Fed's survey of bank loan officers, bank earnings, and the next spending report.

What we know: Card balances fell in August while overall borrowing growth slowed.
What we don't: Whether households are pulling back or lenders are tightening.