The death of the credit card is inevitable. 

Read the final post of this 3-part series.

 

The Solution.

Hamlet’s charachter, Polonius warned, “neither a borrower, nor a lender be“.  But most of us are one or the other, and it’s this endless willingness of lenders to lend and borrowers to borrow that has shaped this recent economy.  It’s not all bad, because it kept the consumer economy moving steadily from the early 1990s until the meltdown of 2007.   But what about the future?  How sustainable is high interest borrowing and lending?  Look around.  We are seeing alternative payment companies like PayPal, BillMeLater, Boku, and ILD Teleservices, experience phenomenal growth.  The alternative payment method (APM) providers offer consumers a secure way to shop online without increasing their debt load and interest loan with “no credit card required” offers, and no interest.  While conversely credit card companies are implementing increasingly hostile practices not only toward consumers but with extra fees for merchants, too.   

A national poll by Consumer Reports lends further validation to this argument:

  • 45% of consumers say they are paying less with credit than a year ago
  • More than one-third (32%) have paid off and closed a card since January 2008,  and half of those that canceled did so in direct response to the actions of credit-card issuers, such as cutting limits, hiking rates, or imposing fees. 

 Rest in Peace

So, do you still think credit cards will be alive and well for another 60 years? Clearly, I think there are some big changes coming, but I’d like to hear your thoughts, so please share them below.

 Oh by the way, here are some other interesting links.  If you don’t go to the site, at least read the headlines:

Consumer Reports Poll: Consumers Angry at Credit Card Companies; Citing Unfair Treatment When Closing Accounts

http://www.prnewswire.com/news-releases/consumer-reports-poll-consumers-angry-at-credit-card-companies-citing-unfair-treatment-when-closing-accounts-63559932.html

Merchants Start Campaign in Battle Over Credit-Card Fees

http://thecaucus.blogs.nytimes.com/2009/03/31/merchants-start-campaign-in-battle-over-credit-card-fees/

Anheuser-Busch Steps Into Credit Card Transaction Fee Reform Battle

http://www.csnews.com/csn/cat_management/malt_bev/article_display.jsp?vnu_content_id=1004030231

“The fees that the credit card companies charge defy logic” –  CHS Joins Battle Against Credit Card Fees

http://www.allbusiness.com/retail-trade/food-stores/4486057-1.html

Angry Consumer Slices and Dices Credit Cards To Protest Rate Increase

http://consumerist.com/2009/01/angry-consumer-slices-and-dices-credit-cards-to-protest-rate-increase.html#comments-content