U.S. Consumer Borrowing Rose, Led by Credit Cards (Update1)

[tpsbmam]

Source: Bloomberg

U.S. consumer borrowing rose in January as Americans spent twice as much on their credit cards as they did a month earlier.

Consumer credit increased by $6.9 billion to $2.52 trillion, the Fed said today in Washington. In December, credit gained $3.7 billion, less than a previously reported increase of $4.5 billion. The figures don't include borrowing secured by real estate, such as home-equity loans.

People once dependent on home-equity financing are turning to other forms of short-term financing after the collapse in subprime mortgages made it harder to qualify for loans. Personal income in January rose at a slower pace than inflation, and credit card usage in January rose for a second straight month.

``There's not much gas left in the tank,'' said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. ``In the early stage of a recession, consumers tend to rely on credit cards to see them through the hard times.''

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aJCsK7w8YlGk&refer=home

[DemocratInSoCal]

1. Don't Forget To SPEND Those Rebate Checks

ESPECIALLY if you could use it instead to pay down the credit card debt, which you're currently paying interest of 28% on. JUST FORGET ABOUT IT AND CHARGE CHARGE CHARGE SOME MORE!!!

Reminds me of the Flintstone's episode, where Wilma shouts...."CHARRRRRRRRRRRGE ITTTTTTTTTTTTT!!!!!!!!!!!!"

[Deja Q]

2. Liz Pulliam-Weston on MSN keeps refuting all the articles re: heavy card usage

http://moneycentral.msn.com/content/Banking/creditcardsmarts/P74808.asp

She's had more recent articles including those factoids too...

Never mind the ones telling people to save, not spend like Britney Spears, et cetera...

But I digress. And if Liz is right, why are credit card companies raising interest rates? They are choking themselves.

And while other articles say "that latte is a luxury", those lattes keep chains like Shitbux in business.

So what if everybody stops spending?

Well, then we'll see more articles blaming consumers for not spending...



Addendum: Sorry, no time to post samples of topics posted by media sources. It's a rudimentary process, but otherwise... still, no doubt you've already seen most of them anyway...