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When Do People Use Credit Cards?

I read an interesting article on this morning that had some fascinating, albeit not unexpected, credit card usage data. Essentially, our credit card usage as a country clearly delineates major consumer holidays and events, including the strong uptick in November and December for Christmas and the second largest usage growth around back-to-school time.

The line graph on the page shows monthly spending increases and decreases on credit cards based on 10-year averages. It looks like a pretty linear progression, from low spending in January on the left to high spending in December on the right. This gives the impression that our spending goes up every month and even year after year.

Being a visual learner, I wanted a circular graph that would include showing what happens between December and January each year. Here you go:

Circular Graph of Credit Card Usage by Month
Monthly Card Usage Is Not Linear by Cyclical

0% growth is the 2nd line from center. Months that are at this 0% line mean that we’re not increasing or decreasing our credit card usage (not that we’re not using credit cards, just not changing our usage). Notice, however, the major decline from December (+2.56% growth) to January (-1.72%) on average each year. It’s as if we collective say, come the first of the year, “Oh, I’m stuffed and can’t take another bite!” We gorge ourselves on credit during the holidays and need a collective credit nap for a few months.

I know it’s obvious, but obviously, we’re still collectively falling victim to seasonal consumer pressures to spend more than we have available to us.

Hey, here’s a radical idea: how about using the early months of the year (as well as September and October), when there are fewer consumer spending pressures, to sock away some savings so that we don’t have to put back-to-school and holiday spending on credit?

It’s a beautiful dream, but I know those who are doing just that sleep better at night all year round.

Sweet dreams!

Todd Christensen-Author of Everyday Money for Everyday People, Todd ChristensenTodd Christensen
Everyday Money for Everyday People

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