Is is possible that the credit card industry could be facing the beginning of the end? While the thought might bring a smile to many peoples faces, it is unlikely that credit cards companies are ever going to go out of business. Due to the state of the global economy however, there is definitely a significant slowing of consumerism which certainly has to have an affect on the profits credit card issuers would normally enjoy. It would appear that after decades of the shop until we drop mentality the tides have finally changed and Americans are coming to grips with the sad reality of their financial situation. 

An eye opening experience.

It really should come as no surprise that that consumerism is coming to a grinding halt. Most families really do not have a choice in the matter as the total credit card debt has doubled since 2000. According to Experian (a global leader in consumer and business credit reporting) the average American with a credit file has over $15,000 in credit card debt not including their mortgage(s). In addition to growing levels of debt the amount of personal savings has been on the decline. When you consider these factors it is understandable that families are changing their lifestyles and adjusting their spending accordingly.

Why does this trend mean for the future?

Unfortunately right now many people are suffering financially due to poor money decisions in the past few years. Ideally most families would use this experience as a launching point for a simpler, back to basics lifestyle that our great grandparents experienced after the Great Depression. There has already been a surge in secondhand shopping, not just for the financial saving but also as people become more conscious of their carbon footprint. Large vehicle sales have declined while the sale of compact cars in on the increase. Perhaps more important than consumer trends is the increase of awareness of what is really important in our lives. When you remove the material trappings that we have become so accustomed to, parents have more time to spend with their children and children spend less time entertaining themselves. People are scaling back and simplifying their lives and in the process they are rediscovering the joy of their family.

Will people stop using credit cards?

It is probably not realistic to think people will stop using credit cards completely. When you consider however the recent changes that credit cards issuers have implemented (that can be considered anything but consumer friendly) and the increased awareness of the damages of living beyond your means I think it is safe to assume that people will be making a conscious effort to charge less and save more……at least for the time being.