Consumers have largely tried to cut their dependence on credit cards since the recession began. However, the vast majority of Americans believe credit cards are important for the continued health of the economy and the American small business sector.
Today, more than seven in 10 adults say that the economy is at least somewhat dependent upon their continued credit card use, and more than three in four believe the same of small businesses, according to a new survey from Ipsos Public Affairs for the American Bankers Association. Likewise, close to four in five feel credit cards help local economies because they provide more payment options.
Interestingly, though many have tried to cut their debts and reduce credit spending, about three-quarters also say that the ability to use credit cards makes it easier for consumers to pay in person, and 70 percent believe credit cards are one of the few ways to make purchases online, the report said. Another four in five say cards are vital to helping consumers make important payments when they don’t have the cash on hand.
Currently, more than three-quarters of Americans say they have at least one credit card, and 57 percent report using that account at least once a week, the survey found. Half use them to cover everyday expenses like groceries or gasoline, while close to three in 10 use them to cover discretionary purchases like summer vacations or toys for their kids. However, some of those polled said they only use them for purchases of more than $100, or for unexpected purchases — at 25 and 21 percent, respectively.
Slightly more than one-fifth of those polled also noted that they use their cards as short-term, no-interest loans when they are able to pay off their balances at the end of every month, the report said. Another 18 percent each use them only when they don’t have the cash on hand, or to accrue bonus points.
Credit cards can be great financial tools when used properly — such as keeping spending low and paying off balances in full at the end of every month — but with the often-high interest rates they carry, consumers can get into a bit of trouble when they rack up too much debt on their cards.
Image: Thomas Northcut