It's the end of the world, or maybe just pizza

Government data and anecdotal data confirm: We're using credit cards more for everyday needs.  This could be a sign of economic Armageddon, or it could just be take-out food.

I'll explain.

As our Jeremy Simon reported yesterday, the Federal Reserve's monthly G19 report on consumer credit showed that credit card spending had surged. The Fed's revolving debt category, which is 98 percent comprised of credit card debt, rose to an annualized rate of 7.9 percent.

The Fed's data are backed up by a new release from Discover Financial Services, which conducts a monthly survey called the Spending Monitor Index. This month's index, also released May 7, shows spending is up overall, and the survey asserts that it's because people are spending a lot more on necessities. They're reining in spending on discretionary items, and expect to continue to do so.

"Hardest hit by the slump in economic growth have been people with incomes under $40,000. They are much less optimistic about the economy and their personal finances than higher income groups, and they are feeling the effects of increased prices more dramatically," the Discover survey said. "The highest percentage of people who are spending more on necessities and less on discretionary items are people who make less than $40,000."

The Discover survey does not measure whether that increased spending comes from savings, from current income -- or from borrowing on credit cards.

Some people clearly are reaching for their credit cards out of desperation. Our own CreditCards.com survey back in December found that nearly 12 percent of Americans expected to have to borrow to pay for their winter heating bills.

With the downturn in home values, many Americans no longer have the ability to borrow from home equity in tough times, so it's tempting to say that the economy may be heading over a cliff because people are borrowing just to eat and drive to work -- an unsustainable situation.

But there are also indications that some of that increased credit card spending isn't only because there's no other option -- it's just increasingly convenient to reach for the plastic.

Papa John's pizza chain had one such cheery announcement. On May 7, the chain proclaimed that its online pizza ordering business had surpassed the $1 billion mark in total sales, with an annualized growth rate of 50 percent. A lot of that is paid for on credit cards. And while pizza is certainly food, ordering it online via a credit card isn't exactly a sign of desperation, or the start of a full economic meltdown. It's just pizza.