Immediately following a minimum wage hike, household incomerises on average by about 250 per quarter and spending by roughly700 per quarter for households with minimum wage workers. Mostof the spending response is caused by a small number of householdswho purchase vehicles. Furthermore, we find that the high spendinglevels are financed through increases in collateralized debt. Ourresults are consistent with a model where households can borrowagainst durables and face costs of adjusting their durables stock.(JEL D12, D14, D91, J38)