Credit Cards Take Back Seat in Feb. Retail Sales
| March 30, 2010 |
When it comes to making purchases how have you decided to pay for them? While in the past, the answer to this question would probably be answered with a credit card, many things have changed and so have many people’s answers.
To get a better understanding of why people answers have changed; we look at an article entitled "Credit Card Usage Drops, Even As Retail Sales Increase" where we see that even with increases in retail sells in February it does not necessarily mean credit card issuers are seeing an increase in usage. Instead they are seeing the opposite and have found that credit card, which once made up nearly half of all payment transactions, are now below that of both cash and debit cards. Even with online sales, credit cards have taken a hit as more consumers are opting to use debit cards and other alternative payments.
When it comes to the decline of credit card usage, it is something research has shown peaked with the dramatic interest rate increases and credit limit decreases at the end of 2009. Before then, it was a slow and steady shift in payment and spending habits to things such as debit cards and cash. As we move deeper into 2010, many consumers have come to think twice before deciding to pay for goods and services with their credit cards. While the reasons are quite different some have decided to move away from their plastic because are still worried about the economy and high unemployment numbers. Others simply have rethought their financial situations and have decided that paying with credit cards may not the best thing when trying to reach their financial goals.
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I can see the truth in this trend as it relates to paying with debit cards or other alternative payments. I personally don’t use credit cards mainly for the reason that I don’t want to get into a financial bind. The use of credit cards can be a disease that is very addicting. Once you accustom your lifestyle a certain way, it’s hard to drop it down a notch.
It’s only a matter of time that cash, checks and other alternative payments will become the first choice of payment method over Debit and Credit Cards. Merchants will soon realize that consumers are willing to maintain their financial responsibility by resorting to payment methods that are “Real Money”.
Step aside Debit and Credit, here comes the “Alternative Payment” world.
Comment by Bryan Dube in Irvine, CA — March 31, 2010 @ 12:26 pm