Trouble ahead? More Americans are using credit cards for necessities

By , CardRatings contributor
  • Google +
  • Twitter
  • Facebook

So, technically speaking, the recession has been over and in our rear view mirror for about two years, and now we get news that people are using their credit cards more. Which is good news for our economy, right?

Well, not exactly. It sounds, at first, like it could be good news, but it is more likely bad.

First Data Corp., a prominent player in the electronic commerce and payment process industry, issues frequent SpendTrend reports that take a look at how Americans are disbursing their hard-earned income. They recently came out with an analysis looking at how June 2011 spending stacked up to June 2010, and it shows that Americans are using their credit cards more, which, as noted, sounds promising. As in, the economy is roaring back to life, perhaps?

Well, not exactly. The report shows that, fueled by inflation, Americans have been using their credit cards more to pay for gas, food and other necessities. Buying that 46-inch TV and then paying it off within the month, and getting a lot of rewards on top of that? Not so much.

Granted, this still could be good news, right? Obviously, this means that people are using their gas rebate cards and paying them off every month and reaping some rewards from that?

Well, that's probably the case for some people, but gas purchases on credit cards were 39 percent higher last June than the previous June. Food purchases on credit cards were up five percent.

And some analysts fear that the nation's collective credit card debt may soon resume its climb. It had been dropping, as Americans paid down their debt. The news that our debt may be climbing, especially for those of us worried about the U.S. credit downgrade, makes a depressing way to end this blog post.

(Long, uncomfortable pause.)

I hear YouTube has some nice videos of kittens playing the piano. Maybe we could all go over there for awhile. Anyone?



0 Responses to "Trouble ahead? More Americans are using credit cards for necessities"

No Comments

Leave a Comment
About Our Ratings ×

Our editors rate credit cards objectively based on the features the credit card offers consumers, the fees and interest rates, and how a credit card compares with other cards in its category. Ratings vary by category, and the same card may receive a certain number of stars in one category and a higher or lower number in another.

The ratings are the expert opinion of our editors, and not influenced by any remuneration this site may receive from card issuers.

Advertisers in our database are highlighted, and advertisements include an option to apply using links on our site. CardRatings.com may be compensated by companies mentioned on the site when a user's application is accepted or approved by such companies.

How do your cards stack up?

Compare your card starting here


Featured Partner Cards