NEW YORK The state of the economy is causing more people to desist from using credit cards in an attempt to stem spending. A new consumer survey from Chicago-based market research firm Mintel found that over two in five adults (43 percent) say they're using debit cards more and credit cards less because of the recession.
Another fifth of Americans (22 percent) said they're relying less on both debit and credit cards as they slash spending. Overall, 83 percent of survey respondents said they've changed their spending habits because of the economy.
"The recession has truly jolted American spending, causing people to cut back on purchases and conduct their finances more conservatively," notes Stephen Clifford, vp of financial services at Mintel Comperemedia. "To avoid taking on more debt, many people have changed their payment habits, choosing debit over credit cards for greater control."
Mintel Comperemedia, which provides direct marketing competitive intelligence, has seen the number of credit card offers sent to Americans plunge as issuers face mounting delinquencies and charge-offs. In the first quarter of 2009, credit card issuers cut solicitations in half, reducing mail volume 49 percent from the fourth quarter of 2008. Mintel Comperemedia estimates that U.S. card issuers sent fewer than 500 million offers in the first quarter 2009, the lowest quarterly total recorded since 2000.
"Financial institutions are adjusting their product strategies in this volatile economy," explained Clifford. "To minimize exposure to even more losses, issuers have stopped filling mailboxes with credit card offers. At the same time, we see many banks looking to other products, like checking accounts and debit cards, for revenue and relationship-building."
According to Mintel Comperemedia, the number of debit card mail offers almost doubled from the fourth quarter of 2008 to the first quarter of 2009, while checking account solicitations increased by 29 percent.