RateAPY

Credit Cards May Indicate a Pattern in Consumer Spending

Posted by: RateAPY Bank Rates News
February 3rd, 2010

It may be common for consumers to use either a credit card or debit card when making a purchase. Tracking consumer spending through the Visa and Mastercard companies may be a good way to detect patterns. Despite record numbers of credit card defaults, both the Visa and Mastercard companies are showing good profits. In part, this comes from consumers using their debit cards to make purchases instead of using cash or checks. Each time a debit card is swiped, Visa or Mastercard gets a piece of the pie.

According to credit card companies, consumer spending has increased. In the third quarter of 2009, retail sales were down 2.4%. By the fourth quarter, they were up 1.7%. Some of the increase in spending is coming from the gradual loosening of the consumer-credit spigot. U.S. banks are slightly more willing to extend new credit. According to the Federal Reserve, new consumer loans are up for the first time in three years.