Using More Plastic May Not Mean Buying More Goods

Don't assume that the recent surge in consumer installment debt signals stronger consumption ahead. For one thing, says economist Mark M. Zandi of Regional Financial Associates Inc., part of the pickup simply reflects rising substitution of credit cards for cash and checks. Both businesses and individuals, he notes, are making greater use of credit cards for a wide variety of purchases. Although they pay their card bills on time and thus aren't really borrowing, the level of installment debt outstanding rises.

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