August 3, 2009
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News: Credit Card Circulation Declines
The recession has affected everyone in the U.S. Credit card debt has risen to an all time high, unemployment is near record breaking numbers, auto dealers are going under, insurance companies have cut back in healthcare benefits, and healthcare has nearly double in the past decade. Americans are just plain worn out by the constant dipping into their pockets by the money hungry greedy activities of Wall Street executives. Of course, Americans have to take some responsibility for racking up those massive credit card bills. Whether it is to their credit or not, the latest statistic showed that there are 104 million less credit cards in circulation than a year ago. MasterCard recently reported they have 54 million less cards in circulation while Visa reports having closed nearly 50 million accounts.
It would appear that many Americans have cut up their cards and are depending more on cash and debit. Of course, we must also give some credit to the credit card companies who have also taken measures to reduce their risk of continued loan defaults. Depending on which side of the fence you live, this reduction could be seen as a positive or a negative. For consumers who have cut up their cards and have reverted back to paying cash for all their purchases, this is truly a welcome release from the pressures and worries of meeting monthly credit card bills. However, for the lenders, this could mean loss of earnings and profits.
The whole scenario will most likely have a ripple effect with regards to higher interest rates and fees. After all, those credit card companies have had to dig deep into their pockets to cover the enormous loan defaults. On the other hand, if the number of cards in circulation continue to drop, consumers might begin to see some more competitive deals. For those who have maintained their good credit history, the rewards might be better than you think.