Report Claims Credit Card Use Declining

Used properly, credit cards are fantastic.  They allow people to buy a gallon of milk (or a plasma TV), not pay anything for one month, and collect some sort of reward (even if it’s just an improved credit score) in the meantime.  Unfortunately, a lot of folks don’t pay off their balances, and it looks like these consumers are turning to credit cards less frequently.

The recession has caused people to grow cautious, and Jim Van Dyke, the president of Javelin Strategy & Research, stated, "From declining consumer use, rising risk levels, and possible new merchant fee legislation, the credit card industry is taking several hits right now . . ."

Should the industry respond by raising interest rates or limiting credit lines, it seems people will shun their cards even more as a result.  A vicious cycle might result, with small businesses stuck in the middle.

What can you do?  Well, small business owners can’t be expected to lecture every customer on the benefits of not carrying a credit card balance.  Conversely, they shouldn’t trick people into saddling themselves with bigger ones.

Perhaps a poster about payment options or a cashier’s question is about all that can be expected here.  Although if anyone has some better ideas – or just a general comment about this trend – we’d be happy to hear you speak up in the comments section.