The Road to Recovery: A View from the PressNitin Sumangali |
As regular readers of this blog know, the Global Insights team has just published the latest version of our annual study of the credit and debit card dynamics and U.S. consumers. This study contains findings about the change from 2011 to 2012, but also takes a longer view to examine how since the start of the financial crisis in 2008 consumer sentiments and spending behaviors have changed.
To expand on some of the points in the paper, I had a discussion with David Heun at PaymentsSource, which can be found here [subscription may be required]. In his article, David points to data from the paper indicating that during the early years of the crisis debit card growth came partially from credit cards. He goes on to say that MasterCard’s paper shows that that has reversed and that in 2012 $7.7 billion in credit card spending growth came from debit cards.
As I explain in the piece itself, this shift must be viewed in the context of the fact that debit card spending grew by 7 percent in 2012, just as credit card spending grew in the same period by 8.4 percent. The simultaneous growth of credit and debit card spending in that year demonstrates that as the economy slowly improves, the two spending methods don’t necessarily grow at each other’s expense, but rather that consumers choose which financial tool to use depending on their situation and their needs.
David’s article goes on to note that there are still a number of economic factors that are impacting consumers’ decisions on spending in the future, but that only strengthens the case for Global Insights’ approach of consistently examining the data on an annual basis. By taking a historical view of the data, we can filter out the momentary noise to get a clearer picture of the state of the U.S. consumer.