May 8, 2009
More consumers are leaving their credit cards in their wallets these
days, as the dreary U.S. economy continues to take a toll on spending.
A new consumer survey from market research firm Mintel shows over two in five adults say they're using debit cards more and credit cards less because of the recession.
Another 22 percent told Mintel they're relying less on both debit and credit cards as they reduce spending. Overall, 83 percent of survey respondents report having changed their spending habits due to the economy.
"The recession has truly jolted American spending, causing people to cut back on purchases and conduct their finances more conservatively," said Stephen Clifford, vice president 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, a service that provides direct marketing competitive intelligence, has seen the number of credit card offers sent to consumers plummet as issuers face rising delinquencies and charge-offs.
In the first quarter of 2009, credit card issuers cut solicitations in half -- reducing mail volume 49 percent from the first quarter 2008. Mintel estimates U.S. card issuers sent fewer than 500 million offers in the first three months of this year -- the lowest quarterly total recorded since 2000.
"Financial institutions are adjusting their product strategies in this volatile economy," explains 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."
Mintel reports the number of debit card mail offers nearly doubled from the final three months of 2008 to the first quarter of this year, while checking account solicitations grew by 29 percent.
