Fueled by a burgeoning economy, shoppers have slowly but surely rekindled their love affair with plastic. A new MasterCard analysis shows that in 2012, U.S. credit card volume grew by $172 billion year-over-year, an increase of 8.4%.
We’ve pretty much done a complete 180 since the onset of the recession. Back in 2008, Americans shifted more than $140 billion from credit to debt card spending.
You could say consumers are simply feeling more secure about their ability to handle credit card bills these days. But looking closer at the study, we found two dangerous signs that we could be getting in over our heads again.
More than half of credit users say they continuously carry a balance on their accounts and 54% of consumers say they use credit for rewards, up a full 9 points from 2008.
Credit lenders are incentivizing overspending and consumers are clearly taking the bait.
Already, we can see the effect rewards are having on credit use. The average credit card transaction is only $93, signaling that consumers are leaning on credit even for everyday purchases in order to get rewards.
Credit perks are all well and good if you’re planning on paying your card down each month. But what’s the point in cashing in credit rewards if you’re dragging your credit score down and running the risk of paying late payment fees in the process?
There’s real danger in relying on credit cards just for a fe! w extra cashback points. First of all, carrying balance on your credit card is one of the easiest ways to lower your credit score. You’re basically telling lenders that you’re willing to rack up charges without having the means to pay them off in quick fashion.
“The amount of debt a consumer carries tends to be highly predictive of future credit performance because the amount a person owes has a direct impact on her or his ability to pay all their credit obligations on time each month,” says Barry Paperno, consumer operations manager for myFICO.com. “While having debt doesn’t automatically put someone in a high-risk category, as balances increase, the probability of having difficulty making payments on time each month increases.”
In an ideal world, everyone would pay down their credit card balance in full each month. Realistically speaking, most experts recommend keeping your total debt load at one-third of your available credit limit.
We’d recommend going even further. A recent FICO report found that people with the highest credit scores typically carried debt loads less than 7% of their total limits.
A good rule of thumb: If you’re about to use a credit card, just ask yourself if you’d be making that purchase if you were using cash instead. If the answer is no, chances are you’re better off keeping that card parked in your wallet.
drag2share: Wall Street Is Punishing Adtech Players For Failing To Make Money (MM, VELT, MRIN, AUGT, TRMR)
If you’re looking for signs of the adtech bubble popping, then Ad Age may have found a couple for you. Three high-profile adtech companies went public in the last year and a half — Mobile ad network Millennial Media, online-ad provider Marin Software and video-ad server Tremor Video — and all have seen their stocks largely rejected by investors, even while the broader market rises.
Here’s a summary of public adtech stocks, based on their IPOs (or historic highs) and their current prices:
- Marin Software: Debuted at $16.26, now languishes at $12.
- Millennial Media: Debuted at $23.50, now at $9.67
- Tremor Video: Debuted at $8.50, now at $8.36
- Velti: Debuted at $15.58, now at $1.13
- Augme Technologies: Hit $4.90 in 2003, now at 36 cents.
You could add Groupon into the mix too. It debuted at $26.90, and is now worth only $8.90.
All these companies are chronically unprofitable. The Velti situation is most worrying — its revenues are down too and the company is in turnaround mode.
Search — the very cornerstone of the Web — has begun to show signs of decline on desktops and laptops.
Meanwhile, search is surging on smartphones and tablets. Mobile searches are quickly becoming the main way in which consumers find everything they need — whether it’s information, services, or physical and digital goods.
That means there’s a great opportunity, but also that search has more work to do. There are kinks to figure out in areas ranging from app discovery to tracking the effectiveness of local search ads.
LONDON (Reuters) – WPP, the world’s biggest advertising company, reported a stronger-than-expected rebound in revenue growth at the end of 2012 and nudged up its forecast for this year, citing signs of improving business confidence.
We have already seen what Jeremy Lin’s popularity means on a world-wide scale. But there has also been a huge impact at the local level. And one of those factors is the cost of going to see the Knicks play.
Courtesy of SeatGeek.com, is a look at how prices for last night’s game between the New York Knicks and Sacramento Kings on the secondary-market changed over the last week. In the six days leading up to the game, prices rose 245%.
So if you were hoping to see the Lincredible Circus, it is going to cost ya…
It is now the second largest search engine in the U.S., just edging past Yahoo for the first time in December, according to the latest comScore data. That’s nice and all, but Microsoft is in a partnership with Yahoo, so it probably doesn’t want to be taking share from Yahoo.
- THE MICROSOFT INVESTOR: Nokia And Microsoft To Ship 37 Million Windows Phones This Year
- Microsoft Wins Again: Another Big Android Partner Signs A Patent Deal
- THE GOOGLE INVESTOR: Motorola And Chairman Schmidt Agree That Differentiation (Not Fragmentation) Is Key To Success
Amazon signs with Fox to add over 11,000 TV shows and films to its Amazon Instant Video streaming service, which is free for Amazon Prime users.
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
Collaborators – Digital Profs
- Netflix vs Blockbuster - Perfect example of an industry replaced by a more efficient version of itself
- Try On New Glasses in Warby Parker's Virtual Booth
- Marketing Costs Normalized to CPM Basis for Comparison
- The JKWeddingDance video was real; the viral effect was MANUFACTURED - Post 1 of 2
- Coke vs Pepsi vs Dr Pepper
- Samsung 52 inch HDTV $9.99 at BestBuy - purchase receipt below (6:21a eastern time August 12, 2009)
- Facebook Is Running Out Of Time To Figure Out Its Mobile Advertising Strategy (FB)
- The Grand Unified Theory of Marketing(tm) - Digital String Theory
- What is Web 3.0? Characteristics of Web 3.0
- Brand Advertisers: Escaping an Ecosystem of Digital Advertising Fraud
- #SESNY: Toward a Performance Mindset for All Advertising
- Tips for Marketers Selecting a Digital Agency
- Context Is Not King or Queen; It's Just Necessary
- 2013 New Year's Digital Marketing Resolutions
- The Good, Bad, and Ugly of Online Campaign Ratings and eGRPs
- Why You Should Banish the Net Promoter Score Immediately
- Digital Strategy To-MAY-to vs. To-MAH-to
- The Agency-Client Relationship is Forever Changed
- Targeting vs. Privacy - Who Will Win?
- October 2015 (2)
- September 2015 (7)
- August 2015 (6)
- July 2015 (2)
- June 2015 (5)
- May 2015 (4)
- April 2015 (32)
- March 2015 (57)
- February 2015 (79)
- January 2015 (86)
- December 2014 (69)
- November 2014 (98)
- October 2014 (150)
- September 2014 (109)
- August 2014 (44)
- July 2014 (92)
- June 2014 (118)
- May 2014 (173)
- April 2014 (130)
- March 2014 (247)
- February 2014 (167)
- January 2014 (222)
- December 2013 (167)
- November 2013 (111)
- October 2013 (116)
- September 2013 (214)
- August 2013 (210)
- July 2013 (200)
- June 2013 (87)
- May 2013 (87)
- April 2013 (70)
- March 2013 (114)
- February 2013 (89)
- January 2013 (136)
- December 2012 (96)
- November 2012 (130)
- October 2012 (147)
- September 2012 (93)
- August 2012 (93)
- July 2012 (112)
- June 2012 (71)
- May 2012 (82)
- April 2012 (80)
- March 2012 (122)
- February 2012 (114)
- January 2012 (129)
- December 2011 (60)
- November 2011 (54)
- October 2011 (29)
- September 2011 (17)
- August 2011 (30)
- July 2011 (18)
- June 2011 (19)
- May 2011 (23)
- April 2011 (23)
- March 2011 (52)
- February 2011 (69)
- January 2011 (108)
- December 2010 (82)
- November 2010 (67)
- October 2010 (68)
- September 2010 (44)
- August 2010 (101)
- July 2010 (61)
- June 2010 (28)
- May 2010 (28)
- April 2010 (26)
- March 2010 (33)
- February 2010 (21)
- January 2010 (13)
- December 2009 (4)
- November 2009 (2)
- October 2009 (14)
- September 2009 (6)
- August 2009 (19)
- July 2009 (34)
- June 2009 (11)
- May 2009 (4)
- April 2009 (6)
- March 2009 (13)
- February 2009 (32)
- January 2009 (25)
- December 2008 (1)
- October 2008 (1)
- June 2008 (1)
- November 2007 (1)