Credit Card Issuers’ Long Road Ahead
| April 29, 2010 |
Regardless of keeping them or leaving them behind, many cardholders have decided to spend less with their credit cards. While stories are different for each cardholder that has ultimately made the choice to move to other ways of making payments, one thing they all have in common is the effect it has taken on credit card issuers and their dominance over the payments industry.
Because the cost of using credit cards have grown dramatically over the last year due to the raising of interest rates as well as increased or new fees, they have quickly become the priority of Americans. Unlike in the past where majority of cardholders carried around 3 to 5 credit cards on average many have found themselves with much fewer. While for some it was due to the issuer closing an account, for others it was a choice they decided on when it was realized how much money they were truly spending just by swiping their card.
As you may already know credit cards were the leading way consumers decided to pay for goods and services. Since then the usage has fallen and is expected to continue to fall for a little while longer. Instead consumers have migrated not only to using cash but also debit cards which now offer rewards as well as cash back on many purchases at select locations. Another option that has garnered the attention to companies is that of prepaid cards. While in the past they were more of second thought product, more people than ever from every background are using these product for more than just purchasing products online. We can only wait and see if this will continue throughout next year or if the continuous love / hate relationship between credit cards and their cardholders will continue to circle and consumers increase spending on this type of plastic once again.
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