Consumer debt skyrocketed in 4th quarter

Posted by administrator | 09/02/12 | Tagged Credit Card Debt

Consumer debt skyrocketed in 4th quarter
News from CBS News:


Total American consumer debt increased at an annual rate of 7.5 percent in the fourth quarter of last year, a huge rise that indicates U.S. economic growth is again being fueled by borrowing.

According to a report from the Federal Reserve, credit card debt jumped 4.5 percent to $ 801 billion after shrinking 2 percent the previous quarter. The resurgence of auto sales pushed non-credit card consumer debt up at an annual rate of 9 percent to $ 1,697 billion. In total, consumer credit increased by $ 19.3 billion to $ 2.5 trillion.

The willingness of consumers to take on more long-term debt – like car loans – indicates growing confidence in the economy. Sales of cars and light trucks totaled 12.8 million for all of 2011, a 10 percent increase from the year before, according to researcher Autodata Corp. This trend has continued into the new year. Excluding the period of the “cash for clunkers” program, January was the best month for U.S. car sales since May 2008.

Consumer confidence is so far running ahead of economic reality. All this spending has yet to be reflected in the economy. Initial government figures show the nation’s GDP grew at an anemic annual rate of 2.8 percent in the last three mont…………… continues on CBS News

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Consumers continue using credit cards as Visa profits surge
News from Debtmerica Relief:

During the recession, millions of consumers shied away from using their credit cards on a regular basis due to financial concerns that forced them to reassess their debt relief plans. But now, after many may have been able to successfully reduce debt, consumers are returning to credit use.

Visa recently announced that in the final three months of last year, the amount of card use, and spending, it observed rose significantly on a year-over-year basis. The number of transactions the company processed climbed 8 percent from 2010’s total to 13.6 billion, and the amount of money spent on its branded debit, credit and prepaid cards jumped 11 percent to a total of more than $ 994 billion.

Recent studies have suggested that the new surges in card spending have to do with consumers continuing to move away from using cash to complete purchases, instead relying on credit and d…………… continues on Debtmerica Relief

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Visa 1Q profit rises 16 percent as card use rises

Posted by administrator | 09/02/12 | Tagged Credit Card

Visa 1Q profit rises 16 percent as card use rises
News from Coos Bay World:

Visa Inc. said Wednesday that its fiscal first-quarter profit rose 16 percent, as card use rose both in the U.S. and overseas.

The San Francisco-based payments processor posted a notable 10 percent increase in U.S. credit card use.

But debit card use rose just 6 percent. That’s the slowest debit card growth rate in more than a year, and comes during the first three-month period that new rules were in place to limit the fees retailers pay to accept the cards.

The rules also require that starting in April, merchants get a choice on which network handles their debit transactions. In the last few months, Visa has been offering incentives to encourage stores to choose its network.

Debit growth has been slowing over the past few quarters.

“It didn’t come totally out of the blue,” said Edward Jones analyst Shannon Stemm. While it’s still early to determine the impact of the new regulations, she noted that rival MasterCard Inc.’s results last week showed some apparent debit market share gains versus Visa, which still holds the bulk of the U.S. debit market.

Nevertheless, Visa’s results for the quarter showed strong growth indicating consumers continue to shift away from cash and toward plastic and electronic payments.

Visa posted net income for the three months ended Dec. 31 of $ 1.03 billion, or $ 1.49 per sh…………… continues on Coos Bay World

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Credit card use wanes as consumers hold back
News from Sydney Morning Herald:

An unusually weak Christmas for credit card use suggests the end-of-year spending malaise may have extended beyond retail stores.

Retail figures released earlier this week showed no growth in seasonally adjusted spending in the three months to Christmas. Through the year, spending growth of 2.4 per cent was the worst on record.

Credit card application figures released this morning by the rating agency Veda show requests for cards in the December quarter were down 9.9 per cent on the year before.

Personal loan applications continued to grow, climbing 2.4 per cent over the year.

Veda consumer risk chief Angus Luffman said the decline was unusual.

“The final quarter is typically a time when there is stronger demand for credit,” he said. “Our figures support other data suggesting consumers are becoming more circumspect.”

The decline might also reflect a switch towards debit card and impact of responsible lending laws.

…………… continues on Sydney Morning Herald
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