The changing credit card scenarios in the United States

Monday, April 9th, 2012

You should know how to use credit cards. Understanding credit card is more important than anything else. There are several credit card companies in the United States. However, the popular ones that people use are:

  1. American Express
  2. US Bank
  3. Chase
  4. Wells Fargo
  5. Capital One
  6. Barclaycard
  7. Bank of America
  8. HSBC
  9. Citi

The bankruptcy and delinquency rate for U.S. credit cards on a 60-day basis is 4.27 percent according to Fitch rating.  Even though, credit cards are one of America’s most common financing source whether you’re a small business owner or gradually climbing the top of the corporate ladder. Security and protection is indeed important of your credit cards.

According to a report, nearly 44 percent of small-business owners in the US identified credit cards as a source of financing utilized by their company in the previous year putting all other financing sources aside even the business earning.

From 97 percent consumer usage in 2006, the credit card usage declined to 72 percent for the year 2007. What’s more interesting is the fact revealed by a Javelin 2008 survey claiming that Americans aged 65 years and older uses credit card quite a lot more than other age group of people.

Most credit cards include a fee for exceeding the credit limit. To be precise according to pew safe 2009 project, nearly 92 percent of cards included a fee for going beyond the credit limit. This percentage includes all student cards. The over limit fee is usually ranges from 30 to 40 USD.

Around forty one percent of college students possess a credit-card. 65 percent of these card holders pay full bills each month which is higher than the general adult population. No doubt that you can get a good business with credit card.

The alarming fact to note here is that around 14 percent of Americans go beyond their available credit limit according to Experian national index study report of 2007. The same study also states that in the states of Alaska and Hawaii, consumers end up utilizing at least half or perhaps more of their available credit while Lincoln residents, Nebraska use the lowest percentage of their credit limit.

Considering the existing circumstances, it seems that credit card companies are benefiting at the cost of the average consumer. Soaring prices, expensive education and high interest rates have made it difficult for an average American to survive without using credit cards over the limit.

The bottom line is that credit card companies need to revise credit limits since most customers are fairly unsatisfied with their policies and are perhaps at a major loss. In the year 2010, 91 percent cards charged penalty rates. In 2012, this has gone down to 69 percent.

A country where the entire financial structure is based on plastic money, it may prove to be difficult to transact without using credit cards. However, if you are aware of earnings and expenditures and if you plan each major financial move wisely, getting overburdened due to high interest rates can be avoided. A well maintained bank balance and timely payments go a long way to secure your financial future in times of economic uncertainties. One should do complete payment of credit cards to avoid bankruptcy.

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