Living Without Credit Cards

It is no secret that consumer satisfactions of credit card companies are at an all time law. Credit cards, as useful and convenient as they are, have become quite unattractive among consumers. A lot of that is due to the fact that credit card companies have been busy introducing credit card terms – most of which are not very consumer-friendly – ever since the Credit CARD Act became law.

Now, many consumers are opting to get rid of their credit cards altogether. According to the Federal Reserve, credit card debt – represented by revolving credit – has begun to drop. In November, revolving credit dropped by 20% which is the largest drop ever recorded. According to Experian, the number of new credit card accounts through October dropped by 48% as well, compared to the figures during the same period of 2008. These are most likely being induced by the slowdown in credit usage among consumers, though tightened lending standards among financial institutions may also be a factor.

There are many reasons why consumers want to get rid of their credit cards. Some of these just want a simpler lifestyle for themselves, others are finding that alternative products to credit cards fill their plastic payment needs. There are also others who find what credit card companies have been doing to consumers as outrageous.

For those wanting a simpler lifestyle, they see credit cards as temptation which can potentially ruin their finances. Without credit cards, they find that they can better handle their finances and control their spending.

Debit cards have also become quite popular among consumers who want to get rid of their credit cards. It used to be that, if a consumer wanted to avoid credit cards, he or she could only either pay with cash or write a check. Now, debit cards are fitting the bill quite nicely. According to Auriemma Consulting Group’s survey last July of 2009, 28% of consumers had moved to debit cards.

Consumers who find the practices of credit card companies as outrageous make up for a considerable portion of those who want out with credit card usage. There is good reason why they feel that way. Since the new credit card regulations got signed into law, credit card companies have aggressively changed their credit card terms to get ahead of the law. Card holders have seen fees and interest rates hiked to record levels. This is true even for card holders who managed their credit card debts well. Credit card companies also cut down a lot of consumer’s available credit, putting many consumers already in financial trouble in a tight spot.