U.S. consumers relied more on credit cards in the fourth quarter of last year, as a report released this week by the Federal Reserve shows credit card debt climbed by 4.5 percent during the October-December period.
The volume of credit card debt reached $801 billion, stemming a decline of 2 percent during the third quarter. Analysts pointed to a significant rise in auto sales as driving the trend. This occurred as the total debt load among Americans rose by 7.5 percent over the same period. While higher debt levels tend to reflect improved confidence, this fact has not yet been seen in gross domestic product or other critical economic indicators. "Consumer confidence is so far running ahead of economic reality," reports Constantine von Hoffman for CBS News. "All this spending has yet to be reflected in the economy. Initial government figures show the nation's GDP grew at an anemic annual rate of 2.8 percent in the last three months of 2011." Furthermore, the latest consumer sentiment report from Thomson Reuters and the University of Michigan shows a decline in confidence for February.