One of the easiest ways to indicate how the economy is doing is through consumer spending. With comScore’s latest survey findings it is safe to say things are looking up for the American economy.

ComScore has recently released their “comScore Online Credit Card Report 2010 edition”, an in depth analysis of the online shopping for credit card habits of nearly 1 million U.S. consumers. The survey focuses on four main points:

  1. How economic conditions impact overall consumer spending
  2. Shopping (for credit cards) Behavior and Acquisition
  3. Card Features Valued by Customer
  4. Importance placed on e-Service

In a year — from 2009 to 2010 — e-Commerce spending saw an increase of 8%, while retail and food services sale growth saw an increase of 6% over the course of the year. When combined with credit card purchases, this figures indicates that as consumers grow more confident with the economy and begin to spend more, they also begin to shop around for new credit cards.

According to the figure below, shopping for credit cards increases by 15% when the shoppers feel that the economy is doing really well. Even though spending is a typically used as an indicator for economic improvement, should it be applied to all fields?

Playing the Devil’s Advocate

ComScore emphasized credit card purchases are tied directly to consumer confidence, but are they tied to economic improvement? With consumer confidence constantly used as a marker for the economy it would seem that using credit card purchasing should also fall under this category.

The problem with this theory is many consumers utilize credit cards for the wrong reasons such as splurge spending and emergency funding. Without a healthy financial relationship with your credit card, economic improvements will not benefit you as a consumer.

During the recession, and slow recovery, many consumers shunned their credit cards turning to debit cards and cash in order to have a tighter grip on finances. The increase in credit card shopping may not necessarily be related to the increase in retail and e-commerce shopping in the way some analysts believe.

There is another possibility: as shoppers grow weary of budgeting and take on more expenses with out more pay, they may turn back to credit cards to provide the support needed. Hence the increase spending is actually an indicator of increase credit card usage and consequently an increase in debt.

The study also fails to mention how the ever changing fee structures due to financial regulations impacts the consumer desire to search for a new credit card. The team at has seen a huge spike in threats to leave a bank as well as complaints once new fees have been added to the bank features in our bank reviews section. In fact, the retail shopping increased around the same time the Dodd-Frank Bill was passed by Obama. This fact may indicate that the correlation between consumer spending and credit card purchases may actually mask the fact that it is an actual relationship between the regulations and purchases. This may not be an issue of debate for long considering mobile payments are quickly rising to become the most common source of payments.

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