Reports have indicated that more consumers are turning away from credit cards for numerous reasons. Some indications point to the fact that consumers are simply attempting to gain control over their credit card debt, while there are some individuals who are simply unable to repay credit card debt and have been cut off by their credit card lender.
Some consumers are unable to acquire a line of credit due to financial troubles which have been experienced over the past months, and this could be a contributing factor to the reports of lower credit card use. However, the recession has made more people mindful of their financial situation and has put some cardholders in a position where they are seeking credit card debt relief and more stability in their personal finances.
Obviously, there are factors which weigh into the use of credit cards for many, like the ability to repay or access credit, but more people are said to be backing away from credit card use for reasons like cost, thanks to interest rates, or because of factors like the Credit CARD Act, which has provided more information to cardholders.
Individuals have, in the past, been more comfortable with using credit because they could, in the very least, meet minimum monthly payments. However, more information about credit card debt has shown many cardholders that they stand to pay a substantial amount more when only meeting minimum requirements, and this has also led to many cardholders who may be struggling in their financial life to simply stop using credit.
Consumers have turned to a variety of debt repayment sources, like credit counselors, debt relief companies, or simple budgeting habits which have allowed them to combat their credit card debt, which at the present time may be causing them financial strain. Also, uncertainty in the economy and job market has many individuals focusing their financial efforts in other areas, like their mortgage, and as a result do not wish to acquire unsecured debt from sources like credit cards.
However, the reports of decreases in credit card use are viewed to be temporary and many feel that more consumers will begin using credit cards again once they feel that they are either on a financially stable ground in their personal financial life or they have reduced the amount of credit card debt which is present in their life. As the holidays near, more consumers may use credit cards to purchase gifts, but there are some indications that shoppers could be sticking to a budget and may be opting to use cash rather than plastic this year.