According to First Data, credit card usage was up 8.2% YoY in 1Q2011, 9% YoY in 2Q2011, and 10.6% YoY in 3Q. If those aren’t healthy signs of consumers spending again, I don’t know what is. What’s a little more shocking is that the latest November industry-wide car sales figures are up 14% YoY to 994,000 according to Auto Data Corp with Chrysler leading the way up 45% YoY!
CNN recently highlighted that credit card mailings have surged 85% since the beginning of 2010 to 1.3 billion credit card offers in 3Q2011 and that online credit card use will increase by 63% from 2011 to 2016 according to Javelin Strategy & Research. There seems to be no stopping the use of credit cards is our daily lives. If you are a cash only man, you’re missing the great big bandwagon!
It’s becoming quite clear to me that the US consumer is alive and kicking with money to burn. Some may even call it the start of a bull market! We’ve been frugal for long enough and what better time to start spending money than during the holidays? I recently reported that I spent around $1,700 gross, and $1,010 net after reimbursement on my personal credit card in November, 2011. I definitely feel that I’m spending more than 10% over last year, perhaps more like 25% more.
Besides looking at the hard data, I’ve asked all my friends and family whether they are spending more this holiday season and the general answer is yes. I’m curious to know whether your credit card spending habits have picked up by 10% or more vs. last year as well.
One female friend who makes about $70,000 a year bought herself a $3,500 Louis Vuitton handbag on credit card. I think that’s nuts, but guys spend tens of thousands of dollars more on cars than they need, so oh well. I bought myself a pair of $315 Tod’s handmade loafer shoes for work, which were on sale from $485. I also think this is kind of nuts. I’ve wanted a pair for 5 years, but could never bring myself to spend more than $150 on a pair of work shoes. This year, I said what the hell.
The real issue is whether or not these healthy retail sales numbers will continue through the new year, or fade? I’m seriously considering returning my shoes because I feel too guilty spending double what I normally pay. There’s a good chance other people might feel the same, it’s just a little too early to tell since we’ve all got a 30 day return policy on average!
FAVORITE CREDIT CARDS
Barclaycard® Ring MasterCard® – 1% Back on Balance Transfers – This great card has the lowest APR I’ve seen in the market today at 8% compared to the average credit card interest rate is 15%. You get 1% back on all balance transfers made in the first 60 days of opening an account and there is no annual fee or balance transfer fee. There’s a fantastic social community of Ring MasterCard holders once you join to interact with and save money.
The Hawaiian Airlines® World Elite MasterCard® – Hawaiian Airlines is hands down the best airlines in America. Their service is impeccable, they provide food, snacks, and drinks included in your air fare, and each seat comes with a USB charger. This Hawaiian Airlines card gives 35,000 bonus miles if you spend $1,000 within the first 90 days, gives you one complimentary bag to check-in, and a one-time 50% off discount off your companion’s air fare! Round-trip ticket prices range from $450 – $1,200, so that’s a $225 – $600 savings right there to paradise! You also get $100 off a companion tick for roundtrip coach travel between Hawaii and North America each year, 1 point for every $1 spent, and 5,000 annual bonus miles after $10,000 in annual spend. The annual fee is only $89. Oahu is my home state and it is the most beautiful place to vacation!
Photo: Lake Tahoe Camp Fire, 11/27/2014 Sam.