Credit Card Issuers’ Uphill Battle Begins

As we move closer to the implementation date of the Credit CARD Act, it has seemed that the amount of changes from credit card issuers that plagued headlines in recent months has dwindled. Instead we are now hearing that issuers have started to put money back into marketing (direct mail as an example) where they had pulled back heavily during the last quarter of 2009.

Even with increased marketing, credit card issuers are now fighting an uphill battle that will probably turn out to be a long one. Since cardholders have had multiple dramatic changes to their terms, many have turned away from credit cards, which they had relied on for years to make purchases. Instead they have moved to using debit cards and cash, which have become popular not only among consumers but also with many retailers.

When it comes to how long it will take before consumers feel comfortable in using credit cards again there is a mixed opinion by experts. Many have put the timeline a couple of months after the CARD Act is fully implemented to allow consumers the ability to familiarize themselves with the new laws. Others have put the date sooner than later as credit card issuers have slowly started to ease credit restrictions that have caused a majority of Americans to get declined for the cards that they have applied for. Even with both these timelines set, no one really knows more than the consumer because when it is all said and done they will be the one deciding if using a credit card fits into their financial lifestyle.