There are recent signs the credit card holder is back. But is it in a positive way?
Figures are rolling in about more credit card spending, a trend that has been on the decline since the Great Recession took hold.
A report Tuesday from First Data Corp. showed that the number of credit card transactions grew almost 7 percent last month, while the dollar volume of those purchases jumped nearly 11 percent.
And last week, the Federal Reserve said revolving credit, which is mostly credit card debt, rose 5.1 percent in May to $793.13 billion. That marked only the second increase in nearly three years (or 33 months to be exact).
Some are saying this is proof consumers are feeling better about the economy. And it certainly looks like bankers are more optimistic.
More than two-thirds of bank risk professionals surveyed by FICO said they expect credit card delinquencies to fall or remain flat through the year (even though they rose in the first quarter), while half predict credit card balances will grow over the next six months, according to the quarterly survey released Tuesday.
But there are clouds behind those forecasts. Bankers attribute the expected rise in balances to increased spending as well as smaller monthly payments. The latter smells a little like a consumer in distress.
Similarly, a deeper look at the First Data survey reveals that consumers are turning to plastic to pay for non-discretionary purchases -- the essentials such as groceries and gas.
"People who still had credit cards had to use their credit cards to make ends meet," says Chris Christopher Jr., a senior principal economist at IHS Global Insight. "They're not splurging."
The recent uptick in the unemployment rate, the tepid job gains in June, spiking gas prices and the rise in food costs all underscore this disheartening reliance on credit cards, he says.
So maybe people are actually feeling worse.
How about you? What are you using your credit card for?
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