Americans are using cash less often than they have in previous years, as many citizens begin to make increasingly extensive use of their electronic payment options.
U.S. consumers racked up more than $17 billion in newly acquired credit card debt during the second quarter 2013, according to a report from CardHub.com, indicating that domestic shoppers are placing an increased reliance on electronic payments made at a credit card terminal. The average household now owes more than $6,650 to credit card lenders, an increase from the $6,590 average recorded during the first quarter 2013.
Matt Donaldson told NBC News that the convenience offered by credit card payments has influenced him to use credit card processing options more often than he previously had.
“Pay it and forget it, just a swipe of the card, you forget about it until its time to pay the bill,” Donaldson told the news outlet. “Take the hit once instead of everyday.”
CardHub suggested that consumers are taking on more debt currently than they have in previous years. The debt added onto consumer accounts during the second quarter 2013 represented a 75 percent increase from the second quarter 2010, and an 80 percent increase from the second quarter 2009.
U.S. consumers have also charged-off more than a quarter of a trillion dollars through their credit cards since the beginning of 2009, CardHub explained. A charge-off represents an overdue payment owed to the credit lender – one that’s written off by the lender. Fortunately, the charge-off rate, recorded at 3.86 percent, represents the lowest such statistic since 2006.
“More and more consumers have the funds needed to stay beyond their means,” said Odyssas Papadimitriou, CEO of CardHub, according to the news outlet.
However, the build-up of credit debt is slowly decreasing, indicating that domestic shoppers are working hard to make payments even as they rely more heavily on electronic payment processing. The $17 billion recorded in new debt for the second quarter 2013 was represented a 3 percent decrease from the debt added onto consumer accounts during the second quarter 2012, and 12 percent smaller than the debt added during the second quarter 2011, CardHub added.
The Federal Reserve also recently released figures that suggest that consumers are putting an increased importance on their electronic cards. Their latest report noted that consumers increased their borrowing by $10.4 billion in July from June, bringing the national credit debt to a record total of $2.85 trillion.Back To Blog