Credit Card Spending is on the Rise — What Could That Mean for a Recession?

With credit card spending on the rise, is a recession on the cards for the U.S.?

Paying contactless with credit card on a card machine
(Image credit: seksan Mongkhonkhamsao)

According to the Bank of America Institute, around 29% of households that earn less than $50,000 per year used credit cards to finance their spending, which could be a factor that could push the U.S. into recession. 

Curt Long, chief economist at the National Association of Federally-Insured Credit Unions (NAFCU) told CNBC: “Consumer spending represents more than half of the economy, so if consumer spending is strong, that alone is, generally speaking, enough to keep the economy from slipping into a recession.”

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Vaishali Varu
Contributor

Vaishali graduated in journalism from Leeds University, UK. She has worked for her local news outlet, the Leicester Mercury as well as writing personal finance stories for digital publications, The Money Edit, MoneyWeek and GoodToKnow. When she is not writing about money-saving, deals, finance hacks and other personal finance topics, Vaishali likes to travel and she's a foodie.