We’ve all heard that the recent economic difficulties have prompted more Americans to start paying down their debt, increase their overall savings rate, etc. As a part of this trend, credit card usage has reportedly declined.
Well… If you actually look at the numbers, you’ll see that reports of the demise of credit cards have been greatly exaggerated. Want proof? Check out this infographic from Index Credit Cards (below) that summarizes U.S. credit card usage.
In short… Yes, consumer debt has declined over the past few years for the first time in recent history – from a high of $974B in 2009 to just over $800B last fall – but credit card usage is still pervasive.
A few thoughts… For starters, I was a bit surprised by the large number of credit cards per cardholder. While I know that some people carry a wallet full of rewards credit cards, an overall average of 7.7 was higher than I would’ve expected.
Beyond that, I was impressed that American Express has a market share roughly equal to that of MasterCard. Given that AmEx isn’t as widely accepted, I expected this number to be lower.
At the same time, I would’ve expected Discover to have a bigger piece of the action. While they’re not explicitly listed, the big three account for 86% of all transactions, which means that Discover is embedded somewhere within the remaining 14% – presumably along with all of the store-branded credit cards, etc.
As for the individual usage statistics, these were much lower than I expected. An overall average of 119 credit card transactions per cardholder per year? That’s roughly once every three days. I don’t know about you, but I use a credit card way more often than that, and I charge significantly more than $10,500 per year.
7 Responses to “Credit Card Usage Statistics – Do People Still Love Plastic?”
Ah, but I would say that me, you, and probably many of your readers are not represented in these statistics.
- We do not maintain a balance on our cards.
- We charge nearly every penny we spend because:
- We receive cash or other remuneration from the use of our charge cards.
Amex just gave me a $1,000 rebate on all my personal and business spending from last year. Thanks Amex! Of course thanks also to the sellers who accept Amex despite some of the highest fees in the business. I kind of feel for cash purchasers, but just because I feel for them doesn’t mean I have to join them.
I have one personal and one company-issued (for use in business travel only) card, so somebody else must be compensating for me with more than 7.7 cards. Egads! I have zero balance on both my cards, and intend to keep them that way. I agree with the surprise that AMEX was so close to DisasterCard (to borrow a Dave Ramseyism). It is encouraging that consumers have curbed the debt. Lets hope politicians join us!
The number of cards per user doesn’t surprise me, because it’s common knowledge (for many people) that canceling cards can hurt your credit score. So I, for instance, have half a dozen credit card accounts open, but I only use two cards on a day-to-day basis. (One for my business expenses and one for personal charges.) But since closing those other accounts would lower my credit score, I haven’t closed them.
I use CCs for everything and pay in full each month. These are bills that I must pay anyway(insurance, gas, groceries, utilities, eye care, dentist, car maintenance, etc.) Why not use a CC and get cashback rebates?
Last week, I received $450 in cashback rebates from Chase and BOA. Had I used cash, I would not have gotten this “free money.” I have earned thousands of dollars in “free money” in the past five years. Never paid a penny in interest and penalty fees. I don’t spend the cashback rebates. Instead, I roll them into the Lending Club or into my brokerage accounts.
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