Credit Card Companies See Return to Spending by... - Other News

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Credit Card Applications » News » Other » Credit Card Companies See Return to Spending by America’s Wealthy

Credit Card Companies See Return to Spending by America’s Wealthy

Credit Card Companies See Return to Spending by America’s Wealthy
The content is accurate at the time of publication and is subject to change.

Wealth and spending go together like peas and carrots. A recently releasedSurvey of Affluence and Wealth in America, conducted by the Harrison Group and with American Express Publishing, found that the wealthiest 10% of Americans are ramping up their spending by $26.6 billion in 2011, which is roughly a 25% increase over spending in 2010. This has credit card issuers very excited, but their excitement may be premature.

The Facts and Figures

According to The New York Post, affluent consumers make up approximately 50% of consumer spending in the U.S. This year, these wealthy consumers plan to spend about $359 billion on luxury goods, excluding cars and travel, though automakers are expected to be among the biggest beneficiaries of the extra spending. Over the past year, spending by the wealthy on hybrid cars, travel, shoes, home décor and furniture has risen while spending on handbags and jewelry has fallen, The Post reported.

Who the Affluent Are

The survey covered households with at least $100,000 in discretionary household income. About 1,458 households participated in the survey, and more will be polled in the coming months. Among these households, 70% think the country is still in a recession, but fear of job loss and business failure is down significantly.

Spending Habits

While the survey respondents indicated they would be more discerning in the items that they purchase, 25% more of the respondents said they plan to boost spending in the coming year. Unfortunately for credit card companies and other debt issuers, the majority of these consumers may be purchasing these items using cold-hard cash, considering the almost $4 trillion that have accumulated in their money-market accounts. So even if big spenders charge their new purchases, expect them to pay off the balance before much interest accrues.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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