The story below caught my attention. An early sign that things are getting worse for consumers. When you notice a noticeable uptick in credit card use in a down economy that means that more people are running up debt when they can’t afford to pay. Yikes!
POLK COUNTY (Bay News 9) — During these tough economic times more Americans appear to be turning to plastic when they’re making purchases, and business owners are noticing.
Crowder Brothers Hardware has sold hammers and nails to people in Polk County for three-decades.
And while many small businesses are struggling, their customers keep coming in.
“You can put off buying a new car or some new clothes,” said Bruce Phillips owner of Crowder Brothers Hardware. “But if your toilet is leaking you don’t have that option of saying, ‘well we can let it go — we’ll fix it in a few months.’ So, we’re fortunate there.”
Phillips says the biggest change he’s noticed through the years is that his cashiers now swipe more credit cards than they count cash.
“We’ve probably seen credit card usage go from 30 percent up to now 50 and 60 percent,” Phillips said.
But as more consumers get used to swiping, more are finding themselves in the red.
Americans now owe an estimated $850 billion in credit card debt, which is four times as much as in 1990.
Consumers aren’t the only ones affected by the increase. Small business owners like Phillips say they’re also paying a price as the popularity of plastic rises.
“Cash is king,” Phillips said. “Credit card — we pay a percentage to have those processed and that affects our bottom line profit.”
The Consumer Federation of America reports 58-percent of people with credit cards do not pay their balance in full each month.