Online Calculator | Credit Card Use Is On The Wane

Credit Card Use Is On The Wane

The recent unemployment data had some piggy bank information with it. More people are using fewer charge cards, and using the cards they do use less as well. People don’t see credit cards as the best source of instant cash anymore. The data also shows that individuals are saving more and more. Consumer goods are a huge part of the economy, and purchasing non-essential goods has dropped off which is counterproductive to the economy.

People are putting away their credit cards

The Wall Street Journal reports that credit card use is nevertheless trending downward for Americans. Revolving credit like credit cards, in contrast to things like pay day loans, cash advances, or mortgages, has been declining for a while. Revolving credit use has fallen for the last 21 consecutive months. Credit card companies may need a payday loan themselves before long.

Unemployment has a lot to do with it

During recessions, individuals make less non-essential purchases. Money on hand becomes more important. Buying that new living room set on credit whenever you do not need it and making minimum payments for decades just is not as attractive. The national savings rate, on the other hand, went up. In April, the national savings rate was 6 percent, and for June, it’s up to 6.4 percent, as outlined by the US Commerce Department.

Individuals less secure are less frivolous

If you don’t know you’ll be stable by the end of the year, there is no point in using credit to make large purchases. If financial security is the goal you have in mind, there is no need to go further into debt that you don’t need, unless you’re getting a loan to consolidate and get some debt relief.

Further reading

Wall Street Journal

http://online.wsj.com/article/BT-CO-20100806-715007.html

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