You may be surprised to find out that Americans love using their credit cards.
According to the Federal Reserve, for the first time since the financial crisis in 2008, the preferred method of payment among Americans is using a credit card rather than a debit card. In 2016, a US Payment Study conducted by TSYS reflected that out of the 1,000 consumers who have at least one debit card and one credit card, using a credit card for a payment method ranked highest as the choice for payment. Why?
The primary reason appears to be that there is a huge attraction to the rewards that credit cards offer that a consumer simply does not get when using a debit card. Further, higher income families are more likely to use credit cards because of the rewards that can be accumulated, such as airline mileage, hotel and resort points, not to mention travel perks, cash back points, etc.
But, it could be that the large credit card companies and banks may have jumped too soon, vying for attention from consumers to swipe their credit card and earn all the rewards. Americans are still struggling to get back on their feet, dealing with unemployment and unfortunately, many may have gotten in the habit of using credit cards to charge normal living expenses which can strain household budgets down the line when the card payment comes due.
Using credit cards, even to earn rewards, can be very tricky and paying the balance (or only maintaining minimum balances) on credit cards is certainly advisable. Many, many consumers still operate on a cash basis simply because having credit cards may be a luxury. If you are having difficulties paying your credit cards or bills, there may be a way out and a Bond and Botes attorney would be happy to meet with you in a confidential setting to discuss your financial situation. Please schedule an appointment at one of our offices near you today.