Credit Card Use Up Nearly 10% in 2011
While the effects of the 2008 financialocalypse are still being felt rather broadly, it doesn’t seem the overall credit crunch put Americans off credit card use all that much in the long term. (Or maybe people are still making ends meet for the time being using plastic.)
While the end of that year- 2008- saw more users relying on debit than credit cards, it seems the latter has picked up in a big way going in to 2012. (Protip: If the Mayans were right, we won’t even have to pay off credit card bills.) Credit card processing service First Data- which sounds like a rather subprime credit card lender itself- has spilled the beans to the media about America’s increasing reliance on credit, and credit card use has, according to the company, risen steadily in each quarter above the previous ones. The spike was 8.2% in the first quarter, 9% in the second quarter and 10.6% in the third quarter, the company disclosed- compared with rises of 9.6%, 8.3% and 5.9% for debit cards in respective quarters.
Perhaps even less surprisingly, credit card use was even more notably up on the one day Americans seem to honor the plastic god above all others- Black Friday. Credit card use for the retail orgy was up 7.4% over the same day in 2010, versus debit cards, which were only up 3.4%. Senior VP at First Data Silvio Tavares said that Americans have felt less of a squeeze financially, and soon resorted to their old credit card use habits in the spring:
“Credit is back in favor… Consumers have spent the last couple of years de-leveraging and reducing credit card use, but during the past month- and since April [2011] — they’ve been using their credit cards more and are starting to return to pre-recession buying habits.”
Have you broken out the plastic once again in late 2011? Do you think Americans learned anything from the crashes and over-leveraging that marked the mid-to-late 00′s?
[Image]
Tags : credit card use, credit card use 2010, credit card use 2011, credit card use 2012, credit card use statistics, credit card use up, credit cards
Posted: December 5, 2011
![Wolf Blitzer Asks Atheist If She ‘Thanked God’ After Surviving Tornado In Oklahoma [Video]](http://cdn.inquisitr.com/wp-content/uploads/2013/05/Oklahoma-Tornado-Victims-Reunited-With-Pets-And-Photos-100x100.jpg)
![‘Ugly Baby’ Jab On ‘Footy Show’ Angers Parents [Video]](http://cdn.inquisitr.com/wp-content/uploads/2013/05/ugly-baby-100x100.jpg)
![Taylor Swift’s Disgusted Reaction To Justin Bieber, Selena Gomez Kiss Goes Viral [Video]](http://cdn.inquisitr.com/wp-content/uploads/2013/05/Watch-Justin-Bieber-And-Selena-Gomez-Backstage-Kiss-The-Taylor-Swift-Diss-Video-100x100.jpg)
Dec 6, 2011
Even as Americans are using their credit cards more freely than they have been in a long time, the aggregate volume of credit card debt continues to decline. According to the Federal Reserve, the current level of outstanding credit card balances is the lowest in more than seven years and it is 18.9% below the peak reached in September 2008 when Lehman Brothers collapsed.
Moreover, just a couple of weeks ago Moody’s, a credit ratings agency, told us that in October Americans were paying back credit card debt at a rate of 20.91% of their overall outstanding balances, compared to a historical average in the mid-teens.
What all these statistics seem to be telling us is that Americans have become much more responsible with credit than they have been in a long time. As the numbers clearly show, more responsible with credit doesn’t necessarily mean using less of it. What it does mean is using it within one’s means. http://blog.unibulmerchantservices.com/credit-cards-back-in-favor-with-americans-gain-ground-on-debit
Dec 6, 2011
I agree to a point James, it's about responsibility. I for one pay off my full balance EVERY month and collect 1-5% back on purchases ($700 in Target gift cards last year! with no interest paid). However, less credit use means less chance of default if someone loses a job, has wages cut, hours cut back, finds themselves straddled with medical expenses. If doesn't matter if you are paying back 50% per month if you lose your job and still have $10,000 on your cards you can't pay. I say people should follow the general rule that they don't have more than 20% in credit card debt when compared to their personal savings. For example if you have $10,000 in your savings account you shouldn't carry more than $2000 in credit card debt. That's my personal number but since I carry no credit card debt I don't have to worry about it at this time.