Study: Some Americans cut credit card use

[sabra]

Source: CNN

STRATFORD, Connecticut (CNN) -- When Cappie and Don Perras saw their stock market investments tank this year, they decided to tighten their belts. They drive fuel efficient cars around their Connecticut town and eat at cheaper restaurants if they eat out at all. To avoid impulse buying, they avoid the mall. And for now, at least, they've put away the credit cards.
Like many Americans, the Perrases rarely use their credit cards anymore.

This marks a big change from their old attitude.

"I felt secure with my credit cards like, 'Oh well, I always have my credit cards,' " says Cappie Perras, a special education teacher. "Now I feel like, it's almost like there's a big caution sign in front of the credit card, 'Do Not Use, Only In Case of Emergency,' " she adds.

The Perrases are examples of a trend building among middle-income and middle-aged consumers to cut back on credit card use, according to a new study by Javelin Strategy & Research, a financial research firm. Forty percent of consumers surveyed said they're pulling out their credit cards less than they were at the beginning of the year.

...

"Credit card companies are running a bit scared right now, and for good reason, because people are having a difficult time paying off their balances; and everyday consumers, they're cutting into their purchases right now -- both luxury goods and even the basic necessities," Van Dyke says.

According to the Javelin study, nearly 70 percent of financial institutions say they have cut back on credit card solicitations. Six of 10 say they are limiting the amount of credit offered to customers.

Read more: http://www.cnn.com/2008/LIVING/personal/07/30/credit.cardusedown/index.html

[HockeyMom]

1. Debit card

I just use that. If it costs more than I have, I just do without it. Remember Lay Away where you pay so much a week and then only get the item when you have finished paying for it? Maybe we need to go back to that.

[Xithras]

8. Most stores ended Lay Away programs years ago.

Easy credit reduced the number of people using it, and escalating storage and liability costs made it less financially appealing for the stores. Even Walmart eliminated their layaway program a couple of years ago, and layaways were once a huge part of their business.

They would much rather have you use a store charge card. They know you'll spend more with a charge card, and they'll make more money off interest. Store charges are a profit center, the lay away department wasn't.

[eggplant]

2. We went credit card free years ago

We were just treading water for many years, and decided to go with Consumer Credit Counseling Service to help. Step one was to cut up the cards and go cash only (well, debit card only).

When the economy tanked enough to drive interest rates to the floor, we refinanced the house, and rolled all of our remaining debt into it. Now we're down to just a low fixed rate mortgage and a slightly higher (but still low) *fixed rate* equity line.

The idea of going back to revolving credit is right up there with stabbing myself in the eye with a fork.

[RavensChick]

3. I haven't had a credit card in over 10 years

and I certainly don't wanna use one now, jacked up as the economy is! Debit cards and good old fashioned cash is the way to go!

Rule of thumb--any credit card offers you get in the mail, shred the hell out of them!

Peace

[Richard D]

4. Don't cut credit card use . . .

. . . just cut the fricking things into little pieces, pay them all off, and be free of that toxin.

[Overseas]

5. The huge interest rate hikes a year or 2 ago pushed me to reduce use even further.

Several years ago I reduced the 3 cards to 2 and then down to one. In the past couple of years I reduced use of the one card. When all the cards raised their interest rates across the board, regardless of good credit history, that made me so angry that it cemented my determination to reduce use further. Now I limit my use of the card and often pay the balance in full.

In addition to our fears of how the Republicans have once again bankrupted our country, those large interest rate hikes probably convinced a lot of us to drastically curtail use of credit cards. I was really angry and can imagine many other people were too.

[David__77]

6. I make good money, but food at the dollar store.

It's a priority for me right now to find ways to live more frugally. I suppose it's paradoxical, because I'll spend lots of money on luxuries if they're a good deal, but well scrimp to save a dollar here and there on necessities.

[Gormy Cuss]

7. That's a good thing for consumers.

It's good in at least two ways. First, more people are thinking about credit cards as an enticement to overspend. Second, the credit card companies will need to face facts and start offering better deals to the customers in good standing rather than playing "gotcha" with changes in the terms.

[shanti]

9. i'm one of the

boomers who have cut cc usage. also, retirement is looming ever closely, and i want to retire with the least amount of debt possible. i never get cc solicitations anymore, haven't for several years...

[Sherman A1]

10. I use my Credit Cards for virtually all purchases

(gasoline, groceries, restaurants, etc). I even have some of my reoccurring monthly bills (phone, cell, internet, auto insurance, etc) charged to them. I then make sure that I pay them off every month and take advantage of whatever bonus programs they have. Discover has it's rotating quarterly 5% cash back and it's regular 1% cash back which I then redeem for book store gift cards that make handy presents for nieces birthdays and Christmas. Chase gives me 1% back and 3% on gasoline purchases which is credited to the next statement.

I then use online banking to pay the credit card bills and have saved bunches of checks, stamps & envelopes. It's my method of gaming their system.

I have to buy groceries and gasoline anyway, so I might as well arrange things to the best advantage possible.

[KansDem]

11. I got rid of two credit cards in the last few months...

Feels good...:woohoo: