It's 2017, and the economy is benefiting from something it hasn't had in years: heavy credit card use. Paying with credit cards is up eight percent since 2016. Why are so many people more comfortable using their credit this year than last?
A report from Nov. 15 suggests that there is a relatively low unemployment rate and high consumer confidence, which have combined to make Americans more likely to spend on their credit cards. Consumer confidence is, according to the news, the highest it's been in close to 17 years.
The problem with confidence is that it can lead people to make decisions that come back to haunt them later. In one study by NerdWallet and Harris Poll, it was found that 56 percent of those polled were financing their holidays with credit. Each shopper spends, on average, $660 per person, but this year, more people put that money on a credit card, at least according to the 2016 statistics.
Part of the reason for more credit card usage is because of the popularity of buying items online. Additionally, with online checkout made so easy, it's simple to find what you want and to buy more than what you intended.
Online, the preferred method of payment is by credit or debit card. That means that more people end up putting their purchases on their credit cards. The reduction in anxiety about the recession has also helped the number of people using credit cards rise significantly.
Fortunately, many of these people have the money to pay off their cards, and they do. Why do they use them, then? Credit cards come with perks, like cash back or rewards points. Some people just want to take advantage of those bonuses. Regardless, if you find yourself in trouble with debt, remember that you're not alone. Others have made the same mistakes you may have in the past. With some changes, it's possible to get in control of your debt.
Source: ADWEEK, "Why Are So Many More Shoppers Buying Gifts on Credit This Holiday Season?" Robert Klara, Nov. 15, 2017