NEW YORK, NY--(Marketwire -03/16/12)- Credit card companies have posted impressive results of late. With the U.S. economy once again showing signs of growth, studies show that consumers are charging more on their credit cards over the last year. Five Star Equities examines the outlook for companies in the credit card industry and provides equity research on Visa, Inc. (NYSE:V - News) and American Express Company (NYSE: AXP - News). Access to the full company reports can be found at:
A recent study, conducted by the credit card comparison website CardHub, found that consumers continue charging more on their credit cards. The report finds Americans accumulated nearly $48 billion in new credit card debt in 2011, 424 percent more than what they charged in 2010, and 577 percent more than in 2009. Although total outstanding credit rose only about $4 billion, that number was largely offset by the magnitude of consumer defaults -- $44.2 billion. "First-quarter pay-downs have become less significant and the amount of new debt added in each subsequent quarter has grown compared to its respective counterparts in the previous two years," the report said.
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Greg McBride, senior financial analyst at Bankrate.com, explains that card issuers were aggressive in writing off bad debt in 2009 and 2012. "That's why over the last year or so they've been out actively seeking to grow their business," McBride argues.
One way credit card companies are expanding their reach is with mobile payment and online ventures. Visa Inc., the largest credit card processor, is preparing to roll out its own "digital wallet" which will let customers pay for goods online using a user name and password instead of typing in their credit card numbers for each purchase. The service, called V.me, could also be used in the future to make in-store payments, Visa said.
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