Consumers increase spending while cutting credit card debt

After adjusting for inflation, consumer spending grew 2.6 percent in the third quarter and closed in on the rate of spending not seen since the fourth quarter of 2007, according to a report from the Financial Times. In the last three months, American consumers spent almost $9.34 trillion, slightly below the rate of spending right before the recession took hold, the vast majority of which was done by taking on credit card debt.

However, consumers increased spending by putting more of their personal disposable income toward purchases, rather than by taking on credit card debt, the report said. The rate at which people spent their spare money increased 30 percent over the same figure in the fourth quarter of 2007.

Consumers have successfully cut the amount of credit card debt they carry in recent months by both cutting new purchases and paying more into their balance every month.