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Americans’ Use of Credit Cards Surges in April

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Americans opted for paying with plastic more often in April.

Increasing consumer confidence, the improving stock, housing and job markets, and easing credit policies at banks helped to fuel a surge in credit card use in April. According to the Federal Reserve Board, adjusted revolving credit increased by a whopping 2.4% compared to the same month last year, a huge jump from the prior month’s 1.4% rise.


A nice increase in consumer spending accompanied the rise in debt. After growing by 3.3% in March compared to the same month one year before, personal disposable (after-tax) income jumped by 3.6% in April, Department of Commerce data showed.

Total personal spending totaled $11.9 trillion in April, a 3.6% rise on a 12-month smoothed basis, the biggest monthly increase for the measure in over a year. Most of the increase was due to a more than 3.9% surge in consumption of services, particularly health care, housing, education and financial services, and a 3.5% increase in durables spending, including automobiles. Spending on apparel and footwear rose by only 1.3%.



The personal savings rate rose to over 4 percent in April from March’s 3.8% level, indicating that Americans haven’t thrown caution entirely to the wind. Gains in the stock market are no doubt encouraging some savings and investing.

The most recent job market data show that employers added 217,000 jobs in May, marking the fourth straight month that payrolls have increased by at least 200,000. The unemployment rate remained unchanged at 6.3%.

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