Consumers Relying on Credit for Basics

[CG6468]

Consumers Relying on Credit for Basics as Inflation Erodes Incomes

Thursday, 21 Jul 2011 09:25 AM

Consumers in the U.S. are increasingly using credit cards to pay for basic necessities as income gains fail to keep pace with rising food and fuel prices.

The dollar volume of purchases charged grew 10.7 percent in June from a year ago, while the number of transactions rose 6.8 percent, according to First Data Corp.’s SpendTrend report issued this month.

The difference probably represents the increasing cost of gasoline, said Silvio Tavares, senior vice president at First Data, the largest credit card processor.

“Consumers, particularly in the lower-income end, are being forced to use their credit cards for everyday spending like gas and food,” said Tavares, who’s based in Atlanta. “That’s because there’s been no other positive catalyst, like an increase in wages, to offset higher prices. It’s a cash-flow problem.”

(snip)

Confidence has a long way to climb for those in the lower- income brackets. The sentiment gauge for those making less than $15,000 a year was minus 66 in the week ended July 10 and was minus 69.6 for those earning $15,000 to $24,999, according to the Bloomberg Consumer Comfort Index. The comparable reading for households making more than $100,000 was minus 1.4.

But, hey! The recession is over!

CREDIT CARD USAGE INCREASES

[thundley4]

But, hey! The recession is over!

CREDIT CARD USAGE INCREASES

That sounds exactly like how the Obama regime would spin this.

[CG6468]

That sounds exactly like how the Obama regime would spin this.

...and we anxiously await! 

[JohnnyReb]

It's bad, bad I tell you. I ran a dozer awhile this morning and when I came out of the woods the road was full of cars/trucks. The church at the end of the little traveled county road was giving away free food. Must have been 200 cars/trucks lined up to get the free food. All of them late model, nice, clean, new looking with a lot of fancy wheels and tires in the bunch. Only a couple of clunkers with white people in them. The rest...well...they looked like Obama and Me-Shall, except bigger.