"More than 8 million drop out of credit card use"

[Ethersync]

More than 8 million drop out of credit card use

Nov 29 06:11 PM US/Eastern
By EILEEN AJ CONNELY

NEW YORK (AP) - More than 8 million consumers stopped using credit cards over the past year. The decline stems from a combination of consumer choices and bank actions.
An analysis by credit reporting agency TransUnion found that use of general purpose credit cards bearing MasterCard or Visa logos, or issued by Discover or American Express, fell more than 11 percent in the third quarter, compared with the July to September period last year.

About 62 million people now have an active card, compared with 70 million a year ago.

The Chicago company found that consumers in the subprime category, or those with low credit ratings, were believed to be without cards mostly because they were shut down by banks after payments fell behind or balances were written off.

"One can quite reasonably infer that's not voluntary," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit. Banks have written off record amounts of credit card balances in recent years.

But a significant portion of the decrease in card usage reflects decisions by cardholders to stop using credit, Becker said. "They're simply either not purchasing as much or paying down balances."

Many of these individuals may have shifted to using debit cards. In the past several years the use of debit cards has grown steadily and now surpasses credit card use in both the number of transactions and dollar volume. Interest rate increases by credit card companies and reduced credit lines have contributed to that trend.

Still that doesn't mean consumers are shunning credit altogether. The average card balance stood at $4,964 in the quarter. That represented a slight increase from $4,951 at the end of the second quarter, and the first quarter-over-quarter increase in a more than a year.

Yet it also reflects a 13 percent drop from $5,612 at the end of Sept. 2009.

Becker said the balance increase from the second quarter is mostly an indication that consumers are still under stress. Prior to the recession, he said, carrying a credit card balance was more of a lifestyle decision reflecting spending choices. "Now it's out of necessity," he said. "In times of financial distress, nobody wants to carry a balance. Where people can afford to pay things down, they do."

Unlike mortgages, credit card delinquencies are in a normal range. The rate of late payments continued to fall in the third quarter. Just 0.83 percent of payments were past due by 90 days or more, compared with 0.92 percent in the prior year period.

Becker said late card payment rates have varied widely over time, but haven't skyrocketed to anywhere near what was seen in mortgage delinquencies during the recession.

That's partly because with unemployment high, credit cards became more important for cash-strapped consumers who needed them to purchase necessities like groceries and gasoline, so they kept their payments current.

The third-quarter delinquency rate was highest in Nevada, at 1.28 percent, and Florida, at 1.09 percent. These two states have also been among the hardest hit by the housing crash and foreclosure crisis. Late payments were lowest in North Dakota, at 0.48 percent and South Dakota, at 0.53 percent.

http://www.breitbart.com/article.php...show_article=1

[selena]

Good. While some can manage credit cards, and use them to their benefit, others cannot.

It's hard to imagine that there was a time not so long ago when being in personal debt other than for a mortgage was looked down upon. I think a mental shift back to that mindset would not be a bad thing.

[Sly]

No wonder they keep raising my limits.

[MaDalton]

Originally Posted by selena

Good. While some can manage credit cards, and use them to their benefit, others cannot.

It's hard to imagine that there was a time not so long ago when being in personal debt other than for a mortgage was looked down upon. I think a mental shift back to that mindset would not be a bad thing.

but thats 8 million less potential porn buyers

[PR_Glen]

Originally Posted by selena

Good. While some can manage credit cards, and use them to their benefit, others cannot.

It's hard to imagine that there was a time not so long ago when being in personal debt other than for a mortgage was looked down upon. I think a mental shift back to that mindset would not be a bad thing.

what have you ever gotten by looking down on someone?

Start seeing the potential in others instead and your world changes over night...

never had one, if i aint got the cash, i dont buy it!

[Sly]

Originally Posted by PR_Glen

what have you ever gotten by looking down on someone?

Start seeing the potential in others instead and your world changes over night...

She didn't say she looked down on people. She said being in debt was frowned upon.

[selena]

Originally Posted by PR_Glen

what have you ever gotten by looking down on someone?

Start seeing the potential in others instead and your world changes over night...

You are totally right, that was poor wording on my part.

A re-phrase might be that it was not a common place thing like today, and that society as a whole tended to not live beyond their means like we do today.

[selena]

@MaDalton...They can still use debit cards. ;)

@Sly...Thank you, that is what I meant.

[MaDalton]

Originally Posted by selena

@MaDalton...They can still use debit cards. ;)

@Sly...Thank you, that is what I meant.

i'm not a specialist - but is there any significant difference in denials regarding debit vs. credit cards?

and isn't there maybe also a psychological difference?

like: with a debit card there's only that much money available and is needed for buying groceries - while with a credit card you might think something like "another $29.95 in debt - who cares"...

[SwirlsGirl]

if that was not bad enough, then you have a huge percentage of people with maxed out cards, no room for anything especially around the holiday season

[Sly]

Originally Posted by MaDalton

i'm not a specialist - but is there any significant difference in denials regarding debit vs. credit cards?

and isn't there maybe also a psychological difference?

like: with a debit card there's only that much money available and is needed for buying groceries - while with a credit card you might think something like "another $29.95 in debt - who cares"...

Yes, you understand that perfectly.

[BlackCrayon]

beyond business expenses and concert tickets, i never use the cards.

[BlackCrayon]

Originally Posted by Altwebdesign

never had one, if i aint got the cash, i dont buy it!

i don't see how you can get around not using a credit card in this business. its the only way to buy most things.

[Rochard]

I haven't had a credit card in about 15 years. Before I got into the industry I had a problem with one credit card, so I paid them all off the next month and never had another one.

Oh, I did have a Kay Jewelers card when I lived in Phoenix. I wanted to buy something for my wife without my wife seeing it hit our bank account so I set up a card. I'll never forget it. "Oh, Mr. Buss, this section here is supposed to be what you make in a month, not a year". Um, that is what I make in a month you idiot.

[ottopottomouse]

Originally Posted by Sly

No wonder they keep raising my limits.

Mine keeps going up too - without me requesting it.

Originally Posted by Altwebdesign

never had one, if i aint got the cash, i dont buy it!

Had one right since I was 18 but never used it to borrow just as a substitute for carrying cash.

[pornguy]

Originally Posted by Sly

No wonder they keep raising my limits.

Just call and ask for lower.. A friend just got her Visa to 4%

[pornguy]

Originally Posted by MaDalton

i'm not a specialist - but is there any significant difference in denials regarding debit vs. credit cards?

and isn't there maybe also a psychological difference?

like: with a debit card there's only that much money available and is needed for buying groceries - while with a credit card you might think something like "another $29.95 in debt - who cares"...

But remember that a Debit card can be run as a regular CC as well.

[MaDalton]

Originally Posted by pornguy

But remember that a Debit card can be run as a regular CC as well.

the whole credit/debit card system works differenly over here - for example it is impossible to pile up credit card debt because every 30 days they withdraw your credit card expenses automatically from your bank account. and if that does not cover it you have a problem.

[Sly]

Originally Posted by pornguy

Just call and ask for lower.. A friend just got her Visa to 4%

Limit, not rate. Rate doesn't matter to me, I pay off monthly.

[BlackCrayon]

Originally Posted by MaDalton

the whole credit/debit card system works differenly over here - for example it is impossible to pile up credit card debt because every 30 days they withdraw your credit card expenses automatically from your bank account. and if that does not cover it you have a problem.

wha? pretty much defeats the whole point of having a credit card...

[fatfoo]

The decline in credit card use is interesting.

[Phoenix]

many of that 8 million is probably made up of secondary cards

hell they try to send me new cards all the time

i throw it out...i keep 1-2 handy for personal....and one each for each business

its enough

[Evil Chris]

We (our household) eliminated 3 credit cards this year.

We now have ONE between the two of us.

[Paul Markham]

Originally Posted by MaDalton

i'm not a specialist - but is there any significant difference in denials regarding debit vs. credit cards?

and isn't there maybe also a psychological difference?

like: with a debit card there's only that much money available and is needed for buying groceries - while with a credit card you might think something like "another $29.95 in debt - who cares"...

Haven't used my credit card for years. They keep raising the limit though. LOL

Originally Posted by MaDalton

the whole credit/debit card system works differenly over here - for example it is impossible to pile up credit card debt because every 30 days they withdraw your credit card expenses automatically from your bank account. and if that does not cover it you have a problem.

When they took down the Iron Curtain here, they gave out credit cards like sweets. People ran up bills they couldn't pay back and it caused a lot of problems.

Don't know if it's changed but it used to be. If you want a $10,000 limit on your credit card you had to have $10,000 in your bank account. If it dropped below that the card was frozen. Could never figure that one out.

This was explained to me by our first bank manager here.

He also told me why it took so long to clear a check. The check had to go back to the issuing bank so they could check the signature. They had no fucking idea.

[EthnicLover]

"They're simply either not purchasing as much or paying down balances."

Is this a true turning of the debt tide? I doubt it.

[Evil Chris]

I called up VISA and basically told them to smarten the fuck up and stop raising my limit. I'm eligible for a lot of credit, but that's just because of the amount of money I'm making, but what amazes me is how much credit is available to everyone now, no matter how much income to declare.

My first credit card in around 1986 had a limit of $500 on it. By the time I zero'd it and got rid of it, the limit was $50,000. Insanity.

[jonnydoe]

Originally Posted by SwirlsGirl

if that was not bad enough, then you have a huge percentage of people with maxed out cards, no room for anything especially around the holiday season

And no money for porn. This has had a huge impact. Back in the day when everyone was free-spending what was a $30 a month membership when you had a huge credit limit. Many people are in credit/financial trouble and have moved to debit cards. You think a little harder about purchases when the cash is coming right out of your account.

[MaDalton]

Originally Posted by Paul Markham

Haven't used my credit card for years. They keep raising the limit though. LOL



When they took down the Iron Curtain here, they gave out credit cards like sweets. People ran up bills they couldn't pay back and it caused a lot of problems.

Don't know if it's changed but it used to be. If you want a $10,000 limit on your credit card you had to have $10,000 in your bank account. If it dropped below that the card was frozen. Could never figure that one out.

This was explained to me by our first bank manager here.

He also told me why it took so long to clear a check. The check had to go back to the issuing bank so they could check the signature. They had no fucking idea.

don't get me started on czech banks - lol

[bronco67]

It's funny that this is the first thing I read after putting $1800 on a credit card.

[RyuLion]

Finally Americans are getting smart about it!

but I wonder how long before they get one again..with all the mailers of CC offers..

[MobiusMike]

Originally Posted by MaDalton

i'm not a specialist - but is there any significant difference in denials regarding debit vs. credit cards?

and isn't there maybe also a psychological difference?

like: with a debit card there's only that much money available and is needed for buying groceries - while with a credit card you might think something like "another $29.95 in debt - who cares"...

You're quite right on both counts in my opinion. First, Debit Cards, while they can be used like credit cards, have interesting restrictions on them that vary by issuing bank and that you may not find on your credit card.

As an example, I have a debit card with a major U.S. bank and was out and about and decided to buy a few things at Best Buy (new t.v. and laptop for the office, etc. etc.) my bill totaled out to approximately $3300 with everything and when I went to pay my card was declined even though there was significantly more than that available. I called immediately, concerned that there was a problem with my account and the Risk Department at my bank said they routinely decline large purchases that are "out of pattern". They released the hold and I was able to complete my purchase.

Debit card portfolios are more restrictive and decline more frequently based on various factors including purchase patterns, Merchant type (based on SIC designator of Merchant supplied during authorization), restricted countries of origin for merchants and restricted merchant types.

The psychological aspects are also obvious. Unlike a credit card to consumers debit cards = real money, no re-payment terms. It's cash that they now do not have for other purchases.

[ottopottomouse]

Originally Posted by MobiusMike

As an example, I have a debit card with a major U.S. bank and was out and about and decided to buy a few things at Best Buy (new t.v. and laptop for the office, etc. etc.) my bill totaled out to approximately $3300 with everything and when I went to pay my card was declined even though there was significantly more than that available. I called immediately, concerned that there was a problem with my account and the Risk Department at my bank said they routinely decline large purchases that are "out of pattern". They released the hold and I was able to complete my purchase.

Credit cards here do similar profiling. I had my card stopped earlier this year as I had used it loads on the internet then made a purchase in an actual shop (wasn't huge either only £90) and that was considered uncharacteristic

[Amputate Your Head]

i stopped using credit cards 3 years ago, and never looked back.

i don't miss them and life is better.

[moeloubani]

Average card balance $5k? On a credit card? Damnnn some people have it bad out there

[$5 submissions]

That's 8 million less mofos who could potentially say "Hey, where the fuck did this $49.95 charge come from? I thought I was getting a free membership?"

[TCLGirls]

Originally Posted by MaDalton

but thats 8 million less potential porn buyers

well they can still purchase with debit cards bearing the Visa/MC logo

[SteveHardeman]

Originally Posted by Ethersync

http://www.breitbart.com/article.php...show_article=1

This is a bad thing for pornsites. Or for any merchant for that matter. But, overall, it's a good thing for the country.

[kristin]

I'm one of those who are paying off all my credit cards and don't plan on using them again.

[pimp3611]

It's funny how many of you don't use credit cards ...you don't like getting deals on flights and things I guess.

[tony286]

Originally Posted by SteveHardeman

This is a bad thing for pornsites. Or for any merchant for that matter. But, overall, it's a good thing for the country.

Not really the economy works on spending. Unless expectations change radically and people accept having less in life. Cheap credit made the middle class very unawAre that wages have been flat for a very long time.

[Bill8]

nobody is likely to buy a recurring membership with a debit card. well nobody smart, anyway.

lol i can just see them entering the data in their quicken or whatever. "let's see, I have to be sure to account for that 34.95 a month for my Butt Monkeys membership...".

[Allison]

Originally Posted by tony286

Not really the economy works on spending. Unless expectations change radically and people accept having less in life. Cheap credit made the middle class very unawAre that wages have been flat for a very long time.

I disagree. I think buying less on credit and saving money gives people the confidence to make new smarter purchases that actually might improve their life. People are still spending on state of the art mobile devices like iphones and androids, but they are buying that useless shit any more including all those home upgrades or furniture they buy on credit and then can't afford to make their home payments.

[Amputate Your Head]

Originally Posted by pimp3611

It's funny how many of you don't use credit cards ...you don't like getting deals on flights and things I guess.

many people see those things for what they are now... a carrot on a stick.

[wig]

Originally Posted by MaDalton

but thats 8 million less potential porn buyers

Not if you accept ACH.

[wig]

Originally Posted by pimp3611

It's funny how many of you don't use credit cards ...you don't like getting deals on flights and things I guess.

Not only that, but how the fuck do you check into a hotel?

Credit cards are great for a consumer -- as long as they are not a means to spending more money than you can afford.

[tony286]

Originally Posted by Allison

I disagree. I think buying less on credit and saving money gives people the confidence to make new smarter purchases that actually might improve their life. People are still spending on state of the art mobile devices like iphones and androids, but they are buying that useless shit any more including all those home upgrades or furniture they buy on credit and then can't afford to make their home payments.

They are getting cell phones. On heavily discounted rates bad example. Spending makes the economy work. Took the class in college saving does nothingfor the economy.

[Ethersync]

Originally Posted by SteveHardeman

This is a bad thing for pornsites. Or for any merchant for that matter. But, overall, it's a good thing for the country.

Agreed.

Originally Posted by tony286

Spending makes the economy work. Took the class in college saving does nothingfor the economy.

Spending within ones means, yes. Overspending and burying oneself in debt, no... and that is no better illustrated than by the current crisis.

[Amputate Your Head]

Originally Posted by wig

Not only that, but how the fuck do you check into a hotel?

debit

[wig]

Originally Posted by Amputate Your Head

debit

who would have a debit card in lieu of a credit card? if you are not a broke dick dog and pay your balance off, you're a retard if you use a debit card.

first time your account is fraudulently debited and you fight to get the money back all the while your account is negative that amount, you'll wish you used a credit card.

ETA: 50 broke dick debit card users.