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Customers using credit cards for basic purchases

2011-08-10

In a new trend being noticed today, an increasing number of customers are using the credit cards to pay for basic items such as food and gas. This does not come as a surprise considering the fact that the increase in prices is not proportional to the increase in the income of many households in the country.

A financial analyst from First Data based in Atlanta, Silvio Tavares, says that customers are using their cards for basic purchases in a move to cope with the increase in prices of all commodities. While customers are burning a deeper hole in their pockets, credit card lenders are a happy lot considering that a lot of consumers are now using the cards without any restraint. FirstData reports indicate that customer spending on credit cards in the month of June this year was 8 percent more than what it was 12 months ago.

This increase in cost is definitely not an indication of customers getting more income. It is the sign of increase in prices. The prices of gasoline today are roughly 30 percent higher than what it was at the same time in 2010. And people who are using their cards to pay for their basic needs are not paying off their dues in full each month. This implies that there is debt slowly piling up which needs to be taken care of at the earliest to prevent the problem from burgeoning further. While Americans have put in conscious efforts to reduce their balance consistently since the beginning of the year, the increase in prices is surely throwing them off guard.