Americans increasingly relied on credit cards to make payments in 2016, and made more of those payments remotely, according to new data the Federal Reserve released Thursday.
The number of credit-card payments grew 10.2% last year, to 37.3 billion, compared with an annual growth rate of 8.1% over the previous three years.
The Fed attributed the increase in part to “continued strong growth” in the number of remote payments, such as online shopping and bill paying, which represented 22.2% of all general-purpose credit- and debit-card payments. Remote payments increased 1.5% from 2015, the Fed said. By value, remote payments represented 44% of all general-purpose card payments.
The data released Thursday are part of a new annual collection of information on trends in payments — including credit cards, checks and other electronic payments — that will supplement the Fed’s triennial study of the payments system.
No market for PE exits as car demand wanes, loan losses mount
Lax underwriting, delinquencies plague PE-backed auto finance
Private-equity firms that plunged headlong into subprime auto lending are discovering just how hard it might be to get out.
A Perella Weinberg Partners fund has been sitting on an IPO of Flagship Credit Acceptance for two years as bad loan write-offs push it into the red. Blackstone Group LP has struggled to make Exeter Finance profitable, despite sinking almost a half-billion dollars into the lender since 2011 and shaking up the C-suite multiple times. And Wall Street bankers in private say others would love to cash out too, but there’s currently no market for such exits.
In the years after the financial crisis, buyout firms poured billions into auto finance, angling for the big profits that come with offering high-interest loans to buyers with the weakest credit. At rates of 11 percent or more, there was plenty to be made as sales boomed. But now, with new car demand waning, they’ve found the intense competition — and the lax underwriting standards it fostered — are taking a toll on profits.
Even though consumer confidence cooled for a second straight month in November, CNBC is reporting that holiday spending for the average American household is on track to be the highest in 12 years.
Amazingly, the CNBC All-America Survey found that the average family will spend $900 for the first time in the 12-year history of the poll, eclipsing last year’s estimate of $702 by a wide margin.
Furthermore, the survey of 800 American households – which has a margin of error of plus or minus 3.5 percentage points – found a surge in the percentage of Americans planning to spend more than $1,000. The number climbed to 29%, up from 24% last year.
But before economists and retail analysts begin recalibrating their expectations, it’s worth noting that much of this spending will be funded by debt. Another study by RentCafe which examined spending habits of American renters discovered that, in the 50 largest US metropolitan areas, the average renting family will go into debt due to holiday-related expenses, debt that must be paid off in the opening months of the following year.
Here’s what an analysis of the average renter’s household budget for November and December looks like. As the chart shows, the average American family of four can spend $5,865 during that period without dipping into savings or going into debt.
Nothing but bullish pic.twitter.com/qj1y7uMK6l
— Alastair Williamson (@StockBoardAsset) December 21, 2017