Report finds American consumers turning away from credit
Friday, May 04, 2012
With consumer spending playing a pivotal role in the state of the economy, a new report reveals that credit card spending has dropped $5 billion nationwide between January and February this year.
The report, from Five Star Equities, a market research provider on equities that offers growth opportunities and value, found that credit card companies have been negatively affected by Americans turning away from credit, as the processing fees and interest charges generate revenue for these companies.
"While card companies are benefiting from an increase in card use by overseas customers and the wealthy the average American has held back," the Five Star Equities report states. "According to numbers released by the Federal Reserve credit card charges in the U.S. decreased by $5 billion in January and February combined. The recent financial crisis and recession have led Americans to save more and spend less."
According to Bloomberg, consumer confidence dropped last week to a new two-month low amid growing concerns about the state of Americans' personal finances and a shaky stock market, in addition to other factors. Jobs data has also been less than promising for April, but an upwardly revised figure could be available in the near future.
It is important for potential investors to know how the economy and other factors affect the stock market and online stock trading.
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