Interesting piece in USA Today on declining credit card use:
Credit card usage is slowing. Revolving credit — largely made up of credit card debt — fell by nearly 20% in November, the largest drop on record, according to the Federal Reserve, reflecting less borrowing by consumers and banks’ tighter lending standards. Through October, the number of new credit card accounts was down 46% from the same period in 2008, according to Equifax.
But abandoning credit cards is a much more radical step than using them less. Consumers who don’t own a credit card often have a hard time renting a car. Some hotels won’t book rooms to travelers who want to pay with a debit card or cash. Those that accept debit cards may place a hold on several hundred dollars in the customer’s bank account, which could cause checks to bounce. And many consumer experts say that responsible use of credit cards is one of the most effective ways to build a good credit record.
It will be interesting to see what the long term implications of this will be, because I sense a lot of people now run with the baseline perception that banks and credit card companies exist only to screw their customers.