According to a recent Gallup Poll, there is a record low number of credit card holders who carry a balance from month to month. The percentage of people who do that is 33% which is the lowest number since Gallup began measuring that statistic in 2001.
In line with those numbers, the poll found that 64% of credit card holding Americans usually pay the full amount of their credit card balance. This prevents the banks from collecting their extraordinarily profitable interest rate fees which reach above 20% for some credit cards.
Hurting the banks even more is the number of Americans who are even using credit cards at all. According to this poll 29% of Americans don’t own any credit cards at all. That figure is substantially higher than the 22% figure measured back in 2008.
The Wall Street Journal reported that outstanding revolving credit was paid down by $2.42 billion in February 2014 continuing its trend from the month before. People are paying off their credit cards and using them less.
Why Is This Happening?
You have to assume that the financial meltdown in 2008 has affected these statistics substantially. Some people who got burned from overextending themselves financially are now acting more responsibly when dealing with their money. That means they are borrowing less and living more within their means.
Then there are the people whose credit was so badly destroyed from bad home loans that they can no longer qualify for a credit card. Banks are certainly pickier about who they will extend credit to than they were in the years leading up to the Great Recession.
The Great Recession had such an emotional impact on the nation as a whole that it seems to have caused a shift in mindset about how Americans view credit. The next question we will be asking ourselves is whether or not this change is going to last.
Will consumers revert back to their evil overspending habits any time in the near future? If so, then when. Or, is this psychological shift toward frugality in the American culture going to endure?