Is Lowering Credit Card Interest Rates Enough?
| February 12, 2010 |
What can credit card issuers do to get cardholders to make more purchases? As this question would seem comical, it is one that has probably been brought up in every credit card issuers’ boardroom across the country. While it may seem like the answer is simple, now that many people have shifted to other forms of payment, card issuer may have more to worry about than lowering interest rates.
While lowering interest rates is one thing that could possible get consumers to start using their plastic more, it is only part of the answer. After a year of increased interest rates and decreased limits on majority if not all cardholders, many have had no other choice but to rethink how they will pay for goods and services. During this time, consumers have had the ability to restructure their financial goals and determine if using a credit card would fit in with them.
For issuers, when it comes to answering the question of how to increase card usage it would seem that they have quite a dilemma. On one hand, while delinquencies have declined for many issuers over the last few months, they are still much higher than years past. On the other, many issuers as well as experts really are not sure of the exact moves that will need to be made after the new laws have been fully implemented. Since both of these issues directly correlate with future changes it would seem any changes that influence credit card usage may take some time to be implemented if at all.
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