According to a recent press release from credit bureau TransUnion -
TransUnion’s analysis estimates that more than eight million consumers stopped actively using bank-issued, general purpose credit cards over the past year. This deleveraging is believed to be due in part to charge-offs in the higher risk segments of the population, more conservative spending in the low-risk segments, and significant efforts by consumers across the board to maintain the health of their credit card relationships as a financial cushion. Based upon income levels estimated by TransUnion’s income estimation model, consumers with higher incomes were just as likely as consumers with lower incomes to suspend their use of this payment option.
(Emphasis mine. -NCN)
It’s interesting to note that the decrease is in the number of bank-issued, general purpose credit cards. As banks cut bank in the number of cards issued to “higher risk segments of the population” – and folks in the “low-risk segments” cut back on their spending – credit card use has decreased.
It will be interesting to see if this trend is long-term – or just a result of recent economic conditions. I think I’ll do a bit of research and see if store-branded credit card usage has decreased.
Source – TransUnion