What is a Credit Card Economy?

Americans are borrowing to buy cars and trucks and putting less money down on homes as home prices rise in many parts of the country.

A growing number of people buy goods and services on credit, either through credit cards or through other types of consumer loans.

credit card economy
credit card economy

Credit cards are the fastest-growing form of consumer borrowing.

And they have the greatest influence on the majority of consumers’ financial situation.

More than 78 percent of American households use credit cards on a regular basis.

Most Americans have at least one credit card.

More often, people have at least one general-purpose credit card, and many have two or three.

There are credit cards known as “stores credit cards.”

Stores Credit cards are issued by department stores, gas stations, and other businesses.

Credit cards allow you to enjoy your purchases for up to a month before paying anything—and it’s all interest-free.

If people paid off their credit card balances in full each month, it would be interest-free.

Most people do not.

Credit cards are the fastest-growing form of consumer borrowing.
Credit cards are the fastest-growing form of consumer borrowing.

 

Credit cards aren’t the only type of credit that people use.

The average consumer today has 11 credit “obligations,” according to FICO.

Seven of them are likely to be credit cards, while the other four are likely to be installment loans, such as auto, home, and student loans.

According to FICO, fewer than 40% of consumers have ever been reported as being 30 or more days late on a payment.

Credit cards aren't the only type of credit that people use.
Credit cards aren’t the only type of credit that people use.

And only 20% have ever been reported as being delinquent, which is 60 days or more past due.

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The majority of people pay their bills on time.

FICO is the acronym for Fair, Isaac, & Co, which is called by people in the credit and banking industries.

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