“It’s A Cash-Flow Problem”: The Ever Broker US Consumer Increasingly Relying On Credit Cards For Daily Staples | zero hedge
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Somehow, in all the confusion, the endangered species known as the American “consumer” missed the economic recovery. The reason, as Bloomberg writes, is that consumers are increasingly “using credit cards to pay for basic necessities as income gains fail to keep pace with rising food and fuel prices.” The data comes from credit card transaction processor First Data which reported that the dollar volume of charged purchases rose 10.7% in June (a 6.8% increase in the number of transactions). "The difference probably represents the increasing cost of gasoline, said Silvio Tavares, senior vice president at First Data, the largest credit card processor. “Consumers, particularly in the lower-income end, are being forced to use their credit cards for everyday spending like gas and food,” said Tavares, who’s based in Atlanta. “That’s because there’s been no other positive catalyst, like an increase in wages, to offset higher prices. It’s a cash-flow problem.” Alas, it gets worse.