- - Sunday, July 10, 2011

DEBT

Consumers used credit more in May, but not a lot

Americans took on more debt in May and used their credit cards more for only the second time in nearly three years, stepping up borrowing just as the economy began to slump and hiring slowed.

The Federal Reserve said Friday that consumer borrowing rose $5.1 billion in April. That following a revised gain of $5.7 billion in April. Borrowing in the category that covers credit cards increased, as did borrowing in the category for auto and student loans.

The overall increase pushed consumer borrowing to a seasonally adjusted annual level of $2.43 trillion in May. That was just 1.7 percent higher than the nearly four-year low of $2.39 trillion hit in September.

Borrowing is a sign of confidence in the economy. Consumers tend to take on more debt when they feel more well off. That boosts consumer spending. Ultimately, it gives businesses more faith to expand and hire.

But credit card debt can also be a sign that people are falling on harder times.

CLIMATE

Australia passes huge carbon tax

SYDNEY | Australia announced plans on Sunday to tax carbon pollution at $24.74 per ton to help battle climate change as it moved toward creating the world’s biggest emissions-trading plan outside Europe.

Prime Minister Julia Gillard said there would be a fixed price on carbon pollution, blamed for global warming, from next year until an emissions trading plan is introduced in 2015.

“But we’ve now had the debate: 2011 is the year we decide that as a nation we want a clean energy future. Now is the time to move from words to deeds,” Ms. Gillard said in a rare televised address to the nation.

Under the plan to begin on July 1, 2012, about 500 of Australia’s top polluters will pay a fixed price, starting at 23 Australian dollars per ton, for their carbon dioxide emissions for the first three years. The mechanism would then shift into an emissions trading program, with a floating price set by the market. The government will set a floor price and an upper limit for at least the first three years to avoid price shocks.

INTERNET

Challenge to Groupon’s model is trio of deals

SAN FRANCISCO | Groupon’s online coupons save people cash, but they’re not always great deals for merchants. Some businesses complain that bargain hunters rarely return after getting a cheap meal or massage.

A new site called LevelUp believes it has a way for restaurants, nail salons and other local businesses to keep people coming back. To drum up repeat business, the company offers consumers a series of three deals, each better than the previous one.

Online deal sites abound, but LevelUp hopes to stand out by giving people an initial offer that’s on par with competitors, and following that up with even better deals.

It’s still too early to say whether enough consumers will be willing to pay full price, a key factor that will determine whether LevelUp becomes a serious threat to Groupon or remains one of hundreds of imitators.