Find the best credit card offers online.The current trend among American consumers these days seems to be to move away from credit cards for their purchases. The move is understandable, considering the high and still climbing interest rates card holders are seeing. That isn’t the only concern among American consumers either. Fees are also growing and new fees are being introduced. A lot of card holders, even those with good credit histories have also had their credit limits cut.
Curtis Arnold from CardRatings.com said, “There is definitely an overall shift from credit to debit. This holiday season, it has been accentuated by the credit crunch and the economy”.
A survey by BIGresearch and the National Retail Federation shows that only an estimated 28.3% of American consumers are going to be using credit to pay for their gift purchases this year. That figure is much lower than the figures taken during the 2008 holidays. The figure was at 31.5% according to the survey said. The recent survey took a poll from 8,692 consumers.
According to TowerGroup research director Brian Holiday, “we charged into it thinking things would end a lot quicker” during the previous holiday season. This holiday however, the unemployment rate is still quite high and the economy is yet to recover. Consumers are wary of debt and are doing everything they can to avoid it. Credit card companies are also threatened by the new credit card regulations which are scheduled for activation next year.
Riley also said that there has been a more practical change in the buying habits of American consumers. In fact, it has been going on for the entire year. For instance, during the third quarter of 2009, MasterCard and Visa credit card transactions was only at $313 billion, showing an 11.58% drop from the same quarter last year, 2008. Debit transactions on the other hand rose from $303 billion for both MasterCard and Visa. This is a 5.21% increase from that of last year, during the same quarter.
Silvio Tavares, vice president of industry relations for merchants transaction processor, First Data Corp. also confirmed the current move of consumers away from credit. “ Consumers are preferring to use their PIN debt card as compared to credit or even cash”, he said. During Black Friday this year, PIN debit-card transactions increased by 9%. PIN debit-card transactions are when consumers use a numerical pass code for their purchases. Black Friday is noted for being a day when consumer shopping sees a considerable spike which generates huge profits for retailers.
