Credit Cards and the Economy
Most people believe that credit cards are vital for the economy in order to move forward, including the U.S. small business sector and other financial systems. But exactly how big a chunk of the economy do credit cards impact, and what would happen without them?
Today, over 70 percent of all adults feel that the economy is partially dependent on them to use their credit cards, and more than 75 percent think the same is true about small businesses. Similarly, nearly four in five believe that credit cards are responsible for keeping local economies alive since they offer people more options to pay for goods and services.
Although many individuals have tried to slash their debt and decrease their credit card spending habits, about 75 percent claim that using credit cards makes it much easier for them to pay for things in person, and nearly 70 percent think credit cards are an ideal way to make online purchases. Another 80 percent say credit cards are critical in helping them make essential payments when they’re running low on available cash.
Presently, more than 75 percent of all Americans claim that they regularly use at least one credit card, and 58 percent use that account weekly. Half of them use their credit cards to pay for everyday expenses like gasoline and groceries, while nearly a third use them for other discretionary purchases such as toys for their children or family vacations. But, some consumers will only use a credit card for purchases over $100, or for emergencies. Just over 20 percent of American consumers also state that they only use their credit cards on a short-term basis and therefore have no accrued interest to pay, paying off the balance in full at the end of each month. Another 19 percent only use their cards if they don’t have any available cash on hand, or to accumulate extra bonus points.
When used properly, credit cards serve as excellent financial tools. For instance, spending only a certain amount and subsequently paying off the entire balance at the end of each month is a great way to manage spending as well as boost your credit score.
Credit cards enable people to spend money, and spend they do. Clearly, if consumers stopped spending money with credit cards, the economy would take a hit and jobs would be lost. In fact, the majority of people directly related to manufacturing and selling products, such as shop owners and employees, would suffer in addition to the people who make the boxes that package those products, along with the workers who deliver them. In many ways, credit cards are not only an easy and convenient way of conducting business, they are also an economic engine unto themselves. When used responsibly, credit cards can benefit both consumers and businesses – and that’s good news for the economy as a whole!