Credit Card Spending Up Despite Payroll Tax Increase
(NEW YORK) — Credit card spending is on the rise. In fact, many consumers are using their credit cards as much now as they did during the holiday shopping season in December.
“This is quite unusual because generally right after the holidays people cut back on spending,” says credit card expert Beverly Harzog.
“Usually people get into a little bit of debt in the holidays,” and they try to cut back, she explains.
But a rise in payroll taxes that took effect in January could be making this harder. Banks have eased some of their restrictions on who qualifies for credit, offering high-interest rate credit cards to consumers who didn’t qualify before.
“It lets them into the game a little bit although they are going to be stuck with a very high interest rate,” Harzog says.
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