Credit Cards: Use and Consumer Attitudes,1970–2000

Credit Cards: Use and Consumer Attitudes,1970–2000

images (17)Thomas A. Durkin Board’s Division of
Research and Statistics
Nicole Price
Research assistance

A notable change in consumer financial services over the past few decades has been the growth of the use of credit cards,both for payments and as sources of revolving credit.From modest origins in the 1950s as a convenient way for the relatively well-to-do to settle restaurant and department store purchases without carrying cash,credit cards have become a ubiquitous financial product held by households in all economic strata.In modern commerce,credit cards (along with debit cards)serve as a payment device in lieu of cash or checks for millions of routine purchases as well as for many transactions that would otherwise be inconvenient,or perhaps impossible (for example,making retail purchases by telephone or over the Internet).Credit cards have also become the primary source of unsecured open-end revolving credit,and they have largely replaced the installment-purchase plans that were important to the sales volume at many retail stores in earlier decades.Along with most major societal changes come questions about whether the trend is beneficial or detrimental(or somewhere in between),and the rise of plastic cards for payments and open-end credit is no exception.Credit cards certainly are widely used and accepted by the public.But they have also raised concerns in two areas:(1) whether consumers fully understand the costs and implications of using credit cards(the consumer information–consumer understanding concern) and(2) whether credit cards have encouraged widespread over indebtedness,particularly among those least able to pay (the indebtedness–financial distress concern).The two issues are related,because one result of lack of understanding may be over indebtedness.Both issues remain prominent in public discourse,as debt and personal bankruptcy levels have increased over the decades and media reports of confused consumers have multiplied.

Credit Cards: Use and Consumer Attitudes,1970–2000

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