Does Credit Card Use Signify a More Robust Economy: Joseph Wilk of NJ on Increased Credit Card Use

It has been a tenuous few years in the global economy, but there are many signs that a recovery may be taking hold. One of those signs is increased credit card use. Overall, increased spending is a sign that the recession is ending, but such a sign is doubly true when it comes to credit card use. Credit card use, says Joseph Wilk of credit card processing company Millennium Merchant Services, is tightly linked to consumer confidence. When credit cards come out, it means that consumers are finally yielding to their desires for home goods, cars, and other big-ticket items. It also shows that consumers are confident they can pay for those items.

Discretionary spending is a good sign for the economy, and it’s a good sign for someone like Joseph Wilk, whose business processes credit card and debit card transactions. Consumer spending and positive economic developments are closely tied together because consumer spending creates jobs, and when people have jobs, they then have the money for discretionary spending. When the economy is on an upswing, then, jobs and spending act in concert to create more jobs and more spending – it’s a cycle.

Still, credit card use isn’t the whole picture, Joseph Wilk points out. Debit card use is growing more quickly than credit card use, and debit cards stand in for a more conservative relationship to spending. For the younger generation, debit cards stand in for cash, and credit cards, in a still cautious market, are not always an option. For older folks, Joseph Wilk points out, debit card use is still a growing trend, signaling the fiscally conservative desire to link payments to already existing money in their checking accounts, rather than taking on more credit. While things look promising, it may still be too early to tell whether or not these financial trends signal the end of this years-long recession, or if they are just a short respite from it.