Credit card use is on the rise. At the end of 2008, more shoppers were using their debit cards and cash, but the past month has seen a reversal of that trend, according to First Data, a company that processes card transactions for 4.1 million merchant locations in the U.S.
Since the recession, many consumers have been busy trying to chip away at credit card debt by reducing credit card use. However, since April, consumers have been reverting back to using their credit cards, and, according to senior vice president at First Data "starting to return to pre-recession buying habits." More consumers are also being approved for new credit cards. Only 14 percent were denied a card in 2011, compared with 24 percent last year, according to data from our recent survey conducted the Consumer Reports National Research Center.
According to First Data numbers cited by CNNMoney, purchases made by American shoppers with credit cards rose 8.2 percent in the first quarter of 2011, 9 percent in the second quarter, and 10.6 percent in the third quarter. There were also increases in debit card use, however, those increases were greater at the beginning of the year than they were by the third quarter, whereas credit transactions continued to rise. First Data reported 9.6 percent in the first quarter, 8.3 percent in the second and 5.9 percent in the third for overall debit card use increases.
Last month, we reported that credit card issuers were back to inundating consumers with new offers, many of them featuring low teaser rates, however, our analsis showed that consumers need to read the fine print carefully. Click here for some typical gotchas you should be aware of.
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