MasterCard, the second-biggest credit card network in the world, announced that it increased profits significantly in the second quarter of the year thanks to consumers taking on more credit card debt and decreased expenditures.
The company said that it saw a profit of $458 million for the months of April through July, an increase of 31 percent. This was driven mainly by overseas transactions, which was up 8 percent from the previous quarter. Meanwhile, the total number of transactions the company processed here in the U.S. increased just 0.1 percent.
“We are pleased with our performance in the second quarter,” said MasterCard president and chief executive officer, Ajay Banga. “Solid GDV [gross dollar volume] growth, particularly in markets outside the U.S., continued momentum in worldwide cross-border volumes, and thoughtful expense management all contributed to good financial results this quarter.”
Because profits increased so heavily while sales volume stayed relatively flat, that is an indicator that while consumers are not making more purchases, they are buying more expensive items. This may show that Americans believe the worst of the recession is over.