The latest Nilson Report findings for the first quarter of 2011 show good news for credit card companies and merchants alike: credit card spending is up, and that's only part of the total boost in nationwide overall spending.
Credit card spending rebounds
Total spending on credit, debit, and prepaid cards was $835.18 billion, an increase of 10.8 percent over the same quarter last year. This substantial jump highlights the beginning of a return to normal spending after the 2008 recession. Spending on credit cards alone was $464.70 billion, up 9.4 percent over the first quarter of 2010.
Among the top rated credit cards, Visa held the lead for sheer volume of spending in the first quarter of 2011, while American Express saw the greatest growth over last year's figures thanks to their promotions on some of the best rewards credit cards available. Visa card spending at merchants totaled $199.02 billion, up 9.1 percent over last year. American Express purchases totaled $123.23 billion, up an impressive 14.9 percent. MasterCard customers spent $115.29 billion on their cards, up 4.9 percent, and Discover cardholders $27.16 billion, an increase of 7.8 percent.
Debit card spending also rose, with debit and prepaid cards increasing by 12.7 percent over the first quarter of 2010. At the same time, cash advances decreased by 5.2 percent, with lower demand for over the counter advances, balance transfers, and cash from ATMs.
Signs of consumer confidence
Despite the steep increase in credit card purchases in the past year, these transactions made up a slightly smaller share of total purchases: only 32.4 percent of the total in 2011's first quarter, compared to 33.5 percent in the same quarter of 2010. Total spending is up on cash, debit and credit, painting a picture of a recovering economy and consumers who are less afraid to spend.