Roger Beahm, executive director of the WFU School of Business Center for Retail Innovation talked with Ellen Chang of Mainstreet.com about what the overuse of credit reveals about the economy.
Consumers are using their credit cards more because they feel more confident, said Roger Beahm, executive director of the Center for Retail Innovation at the Wake Forest University School of Business.
“It’s another demonstration of the fact that consumer are finally emerging from the ‘siege mentality’ that accompanied the Great Recession,” he said. “When a person’s income and savings are under attack – as they were during the past several years – there’s a natural tendency to ‘hunker down’ and avoid risk such as being unable to make the credit card payment, as well as reduce expenses, including the expense of high interest on the debt. Now that many consumers are starting to believe we may finally be heading toward an ‘all clear,’ we’re seeing a return to more relaxed buyer behavior.”
Another trend occurring is that consumers are purchasing luxury items again, Beahm said.