Love Affair with Credit Cards is on the Rocks

[ursi]

snip...

The Discover U.S. Spending Monitor is Reporting Consumers Wary, Plan to Reduce Spending.


The Discover U.S. Spending Monitor recorded its third consecutive monthly decline in January, falling more than four points to 86.1 as economic concern continued to grow and post holiday spending intentions moderated.

Both the economic and spending components of the index reached new lows in January as just over 70 percent of consumers now think the economy is in decline and 48 percent feel the same way about their personal finances.

The number of people preparing to spend more next month fell to 30 percent, down a point from December and five points from October.

At the same time, consumers seem to be ratcheting down plans for spending in areas beyond necessities. Nearly half (49 percent) of the January sample said they expect to do less discretionary spending in February. That’s nearly 5 points higher than December and a full 10 points more than what consumers said last September. Discretionary spending was not the only area consumers were expecting to cut back. They also intend to spend less on household improvements, major personal purchases and savings.

more...


http://globaleconomicanalysis.blogspot.com/2008/02/love-affair-with-credit-cards-is-on.html

[4dsc]

1. The middle class is tapped out!

I suspect this informaiton is only going to get worse as the year progresses!!

[Warpy]

3. EVERYBODY but the top 1% is tapped out, really

This economy has been running on credit substituted for real wages so long that people have completely forgotten what it means to live within your means. In fact, many people in this country can't survive on what they're being paid. It is simply not enough to sustain a human life in safe housing with nutritious food and access to health care, let alone the ability to save for unforeseen circumstances or retirement.

Reaganomics made this country unconscionably cruel to its people. It's about to reap its reward.

[DJ13]

2. These banks have squeezed and squeezed people with excessive rates too long

There once was a time when the Fed Funds rate was over 6% and people were only charged 10-12% interest on credit cards.

Now the Fed Funds rate is 3% and they're being charged 30%.

And these banks wonder why record numbers of cutomers are defaulting?

:eyes:

[Adsos Letter]

5. or outright canceling them...

CitiBank made a "business decision" to raise my rate to above 24% because I was 1 week late, twice on an account I paid in full monthly

So I told 'em I was making a "business decision" and canceling their card...and I suspect that many people who don't rely, out of necessity, for that line of credit are doing the same thing...

[Xenotime]

6. You don't want to cancel you card. that will lower your credit score.

You should keep the card open.

[Dover]

7. That's exactly what happened to me and with the same bank too.

I never thought about all those fees much because I always paid on time. And just ONCE I missed my payment and for the first time became aware of just what a racket it was. So I told them I would simply do without their credit card or ANY credit card. That was two years ago and I haven't looked back. I'm very happy with that decision. I now spend only within my means using checks or debits.

And how ass backwards is it to punish those who reliably pay each month. It encourages bad behavior for profit. Sick!!!

[Common Sense Party]

4. This is the BEST thing that could happen to America.

We need to wean ourselves from the easy credit teat.

Only spend what you have:

http://video.google.com/videoplay?docid=-726450075131909113&q=steve+martin+site%3Avideo.google.com&total=351&start=0&num=10&so=0&type=search&plindex=0

[Yavin4]

8. If We Did Live Within Our Means, Then People Would Force Better Wages

Easy access to debt is a tool that the ruling class uses to stop the masses from forming unions and putting pressure on corporations for better wages.