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Social Security Tax Cut Used by Many to Pay Down Credit Card Debt

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Social Security Tax Cut Used by Many to Pay Down Credit Card DebtConsumer spending rose just 0.2 percent in January despite nationwide average income increasing 1 percent, according to a report from Bloomberg News based in part on the most recent statistics from the U.S. Department of Commerce. This is likely due to increased efforts by consumers to pay down their outstanding credit card debt instead of buying more.

“One or two percent in your paycheck is not going to change the way you live,” Marshal Cohen, of the NPD Group in Port Washington, told the news agency. “It’ll make living easier. What it will do is keep you spending the way you’ve been spending, so it will keep the status quo.”

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The cuts were expected to result in about $110 billion in additional funds for consumers, the report said. That averages out to between $1,000 and $2,000 per family, and those with two high-income adults will see as much as $4,000 a year.

Consumers may also be feeling more comfortable with their finances these days, as credit card spending increased in December’s holiday season, leading to the first increase in outstanding debts in months.

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