Credit card reform has been nothing short of a big deal over the past year. Consumers who felt misused by their credit card companies were relieved that some laws would take effect that would finally protect them from abuse.
So now that reform has taken effect, does this mean credit cards are “in” again or are people still avoiding them like the plague? Let’s take a look at where credit cards are today and whether people are actually interested in taking them once again.
Why Credit Card Reform Was Necessary
Through the 2000s, the credit card industry had reached a point where it seemed to openly abuse its customers. From imposing unannounced interest rate hikes to forcing high fees, customers felt that they were repeatedly getting the short end of the stick. Even customers who were simply being responsible and paying off their credit cards were having credit issues.
But then, the recession hit and a new problem arose from the credit card industry. Companies were not as concerned about a credit card payment or even a new credit card application at that point because their money was drying up and they needed to trim their fat, so to speak.
As a result, they began dropping their customers, some whom had been with their companies for years, or even decades.
Because companies were doing whatever they wanted to customers, President Barack Obama pushed for the Credit Card Bill of Rights, legislation that would hold companies accountable for their actions.
By requiring companies to make necessary changes to their policies, including the elimination of retroactive rate increases, keeping promotional rates for at least six months, guaranteeing general rates for at least one year, eliminating fees for paying for items online and placing a cap on interest rates.
But even with all of the changes proposed, many consumers decided to ditch their credit cards and instead opt for debit cards or plain old cash – money that was actually in hand and couldn’t be revoked.
Consumers Aren’t Quite Ready for Credit Cards – Are You?
A recent report from Packed Facts, a financial services and consumer goods market research company, found that credit card usage has dropped while cash usage is up. According to the report, 54 percent of respondents to the company’s survey said that they’d rather use cash than credit cards or even checks.
This appears to be an ongoing trend on consumerism. But there’s good reason for this occurring. According to the Consumerist, it seems that people ditched their cards due to interest rates and other drawbacks that come with the credit card. Others feel that they feel more comfortable with cash.
So are you ready to jump back into the world of credit cards?
If you are, some credit card companies have been offering deals, so that whether you want a new credit card or an additional online credit card there are options available.
For instance, you might consider a 0 percent introductory rate card, which for some is as good as having a free credit card. Or you could try the instant approval cards if you’re concerned about your credit rating holding you back.
Many people simply aren’t ready to jump back into the credit card game. But if you think you are, it’s good to know there are options available for you.
