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Thursday, July 21, 2011

Credit Card use- Fiction & Truth

Credit card use is on the rise.  And there are two ways you can interpret that. On one hand, it could mean the economy is improving and people are feeling better about themselves and where the nation is headed, because economically, to quote Obama Press Secretary John Carney this morning, we're "vastly improved".

Or it means the economic situation is either stagnant or worsening and more people are using credit cards for basic survival and paying bills.

We know the answer.  But for a little "fun", let's present both sides' argument.

Here's how credit card companies see it (from blogsite 'Credit Card Assist, written in late May):

"Increased credit card use in the first quarter of the year indicates that Americans are starting to feel the gradual improvement in the economy and are now starting to feel better about their own finances. The higher spending levels and eagerness to get back to using their credit again also helps the economic recovery. The nation’s top three payment processing companies have confirmed that, indeed, Americans have increased their spending capacity... The good news is that many consumers have started to put serious effort into reducing their overall debt levels."

And how does Banking blogsite BankRate.com view the increased credit card usage among Americans in a posting on July 14th?

"A report Tuesday from First Data Corp. showed that the number of credit card transactions grew almost 7 percent last month, while the dollar volume of those purchases jumped nearly 11 percent... Revolving credit, which is mostly credit card debt, rose 5.1 percent in May to $793.13 billion. That marked only the second increase in nearly three years (or 33 months to be exact).  Some are saying this is proof consumers are feeling better about the economy. And it certainly looks like bankers are more optimistic. More than two-thirds of bank risk professionals surveyed by FICO said they expect credit card delinquencies to fall or remain flat through the year"

So now that I filled your brains with enough propaganda spin and lies to make one feel nauseous, here is a more honest and truthful telling of why credit card use is on the rise...

From Bloomberg:

"Consumers in the U.S. are increasingly using credit cards to pay for basic necessities as income gains fail to keep pace with rising food and fuel prices.

Silvio Tavares, senior vice president at First Data, the largest credit card processor (said) "Consumers, particularly in the lower-income end, are being forced to use their credit cards for everyday spending like gas and food.  That’s because there’s been no other positive catalyst, like an increase in wages, to offset higher prices. It’s a cash-flow problem.”"

~ Notice this the same "First Data" as sourced by that bullshit banking blogsite BankRate when they make the proclamation that 'this is proof consumers are feeling better about the economy'.  There used to be a time and place this type of propagandistic empty writing was very prevalent- it was called the Soviet Union and the paper was Pravda.

Let's continue with the Bloomberg article...

"Rising costs of food and gasoline are leaving Americans less money to spend discretionary items, slowing the pace of the recovery... The value of an average transaction on credit cards outpaced the gain for debit cards, showing consumers are increasingly relying on borrowing to pay for gasoline and other necessities...

The use of credit cards is a “smoking gun” that indicates some consumers, including the long-term unemployed who have lost jobless benefits, are resorting to other sources of cash flow just to “get by,” said David Rosenberg, chief economist at Gluskin Sheff & Associates Inc. in Toronto. “People on the margin are putting necessities on their credit cards and this is a trend that’s very consistent with what lower-end retailers have been saying about their paycheck cycles... For people to think that this rebound in credit-card usage is actually a sign of resurging consumer confidence, I think they’re looking at the situation backwards,”.

We said it before.. we say it again.. besides living in a current Great Recession, we also are living in a Great Detachment.  Politicians, media, banking interests, and those individuals with security in wealth and employment are Completely detached and unconcerned about the struggles and daily suffering of the millions who have been affected by the recession.

And because of this detachment, politicians will not craft legislation to create jobs or expand unemployment.  And media will rarely cover the ongoing recession honestly without injecting empty optimism.  And the banks and financials will look at the 'peons' as simply revenue streams while double-talking the reality in banking industry blogsites.  And others look and say, 'Oh, those people..   they don't want to work..   they are (fill in the blank)'

Its important you know how you're looked by others if you're struggling to make it and doing the best you can to raise a family, because the first sign of true independence of thought and spirit is to stop admiring and respecting the entities that are constantly putting you down.

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