How do you increase consumer spending and make the local economies in Asia grow? Give everybody credit cards. What does this mean to you? Your own credit card may be increasing your consumer spending.
USA Today reports that credit, debit, and other card transactions have risen 158% in the last five years in the Asia-Pacific region. The increased use of plastic is having an impact on both the global and local economies. But for the individual consumer, this story should serve as a huge reminder that carelessly shopping with a credit card is a recipe for overspending. From the story:
Card use often begets higher spending: “It’s a proven fact that if you can make people move from cash to electronic payment, then the average (amount spent) will increase, along with the average number of transactions,” says David Robertson, publisher of the Nilson Report, a payments newsletter.
Here’s an insight into the differences of shopping with credit versus cash at the micro level, coming from an antiques shopkeeper in Mumbai, India:
Farooq Issa, the 150-year-old shop’s owner, says customers generally spend about $200 if they use a credit card. When they use cash, they spend only half as much.