Cry me a river: Card company results show waning credit card use

[Catshrink]

NEW YORK – Shoppers still reach for plastic at the checkout, but the card they grab most often these days is a debit card, not a credit card.

That was spelled out Thursday in MasterCard Inc.'s fourth-quarter results. The payment processor posted a 23-percent profit leap, but its shares were beaten down as the numbers revealed further evidence of the fading use of credit cards, whether by choice or necessity.

"People have been utilizing credit, obviously, to a much less extent," MasterCard Chief Financial Officer Martina Hund-Mejean said in an interview.

Meanwhile, rival Visa Inc.'s results not only showed a huge profit gain, but also its dominance of debit, which consumers use more often to buy necessities like food and gasoline. That shielded the San Francisco company's stock from the session's widespread declines.


http://news.yahoo.com/s/ap/20100204/ap_on_bi_ge/us_earns_mastercard

Even so, both MC and Visa posted a profit, but less. Looks like debit cards saved them.

[marmar]

1. I know that I purchase scarcely anything on a credit card these days.....

F**k those crooks.

[Catshrink]

3. I'm with you on that.

[Warpy]

2. I've seen a lot of ATMs and food stamp cards in the supermarket

but I haven't seen anybody using a credit card in months. I only see them in the mall when I'm walking through to get a haircut.

[glowing]

4. 30% interest on purchases made at a 7% origination terms has done it.

That and the bailouts. People are pissed. Capitalism the way we know it is dead. We need a new economic model that actually works. Capitalism/ consumerism is just not viable unless we want to destroy this world. We need something between capitalism and socialism... a mesh.

[dionysus]

22. wouldn't that just be called capitalism with fair regulations?

i dont think capitalism itself is bad, it's the fact that lack of proper regulation allows greed to destroy it.

[glowing]

23. Certain aspects of capitalism are bad because its constantly selling you more crap.

Some things we need without a doubt. When we start sharing tools or a lawn mower with a neighbor, then the companies lose. Producing crap is part of the environmental problem... But without crap to sell, how do people work? Well, valuing art, music, environment for the environment, and valuing one's personal time and realizing that it should be worth at least enough for adequate housing, food, medical access, and education.

[dionysus]

25. i don't think that's actually the system of capitalism per se as much as "consumerism"

consumerism is bad.

[glowing]

26. So, what are you going to sell in order to keep the current capitalistic model alive?

[dionysus]

32. there's still plenty of basic necessities that will always be produced.

not everything people buy is due to a mindset of media-induced consumerism. people will alawys need to buy food, cars, appliances, ect.

[Statistical]

5. I guess I am in the minority but consider credit to be the lesser of 2 evils compared to debit.

I got tired on the bank/merchant games with debit cards:

* The over drafting an account by $0.12 and getting $34.94 overdraft fee.

* The bank re-organizing my debit charges to maximize overdraft fees.

* The online banking never showing all pending charges.

* The gas station which put a $100 hold on my card for 5 days when I bought $38 in gas making that paycheck tight.


So now I put everything on a single credit card. Groceries, utilities, bills, restaurants, gasoline, everything. I pay the card off each month and never pay a fee. I setup online billpay to auto pay minimum payment when statement arrives so even if I have a brain-fart I won't get late payment fee..

Get 1% cash back and now going on my second year that has added up to $300. To date haven't paid a single cent in interest and no fees of any kind.

[FLDCVADem]

13. We do the same thing

A fee-free card from our credit union, 5% cash back at any gas station, 2.5% at any grocery store, 1% on everything else. We pay it off each month, so we don't have to worry about the interest rate. And even if we did have to carry over, we've got a good rate.

I like the protection aspect - I can dispute charges if a merchant isn't living up to his end of the bargain, insurance is covered for car rentals, etc.

[eridani]

20. I agree. Also have heard that identity theft is more common with debit cards

Don't do cash back---my credit union has that option, but the interest rates are higher. Even though I pay every month, I like to be protected against post office glitches.

[Hannah Bell]

28. yes, the fee aspect of debit cards seems to be a cash cow for the credit card corps.

they're charging you to use your *own* money, whereas with credit they're charging you to use *their* money.

if i'm going to be charged to use money. i'd prefer it to be someone else's.

[canoeist52]

6. So that's why my whole family has been getting CC offers again!

[Loge23]

7. They suck on the other end also

As a merchant, I can tell you that one of our largest expenses is credit card fees - some 1% of all sales this past year.
Last year we dropped Amex - they were off the charts on what they charged us.
We're in the wholesale trade which, as the old saying goes, you make it up in volume - volume that has long since dropped way off. We operate on very tight margins in good years, and on controlling our losses in bad ones. No, our owners do not live in mansions.
Unfortunately one of the biggest players in our industry takes credit cards, so everyone takes them. Our customers use them for rewards, which cost merchants even more - but you have to take them to compete.
The banks that issue these make exorbitant profits off this - and off the backs of the buyers and sellers.
Just another example of how big business is actually killing the golden goose.

[Hannah Bell]

29. thanks for that. interesting.

[ddeclue]

8. Ummm DUH!!! Consumers are voting with their wallets and CC companies have cooked their own golden

goose by pushing it just too far.

[roamer65]

9. I am a "deadbeat" with Chase now.

Not paying interest and getting the cash back with a no-annual fee card.

I suspect cash back will end very soon with most cards.

[Catshrink]

10. And, if people migrate to credit unions

they'll be hurting even more. Probably not enough to do serious damage but enough to draw a chuckle from the bastards about "the little people" trying to challenge their control.

[rhett o rick]

11. Capitalism will kill itself. It wants more and more until there aint no more. nt

[Fixed_Based_Operator]

12. What happens if capitalism dies?

Greed is working overtime, but what comes next?

[rhett o rick]

14. Haiti, i think is one example, of the disaster of capitalism.

Once upon a time the capitalists needed the American worker. Now globalization has eliminated that need. They only need us now because we have a lot of capital and they are draining us of that.

[Mari333]

15. I fortold this to a friend last year

as the CC companies hike rates, and people run out of monies on their CC, there will be little or no usage of the damnable things.
I live in a tourist town, and last summer was not so bad, even after the recession, people used their cards.
but this summer? I have a feeling its going to suck. People are out of money. People are out of credit.
I foretell a lot of small businesses in town to go under. Already, 2 of the biggest storefronts in town are empty.
one was a dept store that had been here for 150 yrs.

[roamer65]

31. You are absoutely right.

Credit constriction is picking up steam.

It is going be ugly this summer.

[nonconformist]

16. Well gee... I wonder why?

Wouldn't have anything to do with ridiculous interest rates or exorbitant fees, would it? Or their intimidating, bullying collection practices?

Maybe they'll go write another bankruptcy restrictions bill for congress to rubber stamp.

[pecwae]

17. I use debit exclusively,

but was told last week at a local shop I frequent that they will stop taking them. Apparently, MC and VISA put a 3% surcharge on the store when a customer uses one. This shop, being local and quite small, has no choice but to discontinue accepting them due to cost. Lucky for me they will still accept local checks.

[bridgit]

18. Pft, fuck them, we rarely use ours other than one card for business...

The other day we used the ATM debit for a business trip so...CCCo's can reap what they have sown too

[era veteran]

19. We are targets of financial institutions

Our bank started charging for processing night deposit bags. We will be switching banks.

[undeterred]

21. They are victims of their own success.

They'll have to figure out some other way to rip people off.

[Stinky The Clown]

24. I would never use a credit card if my debit card allowed greater than $500 a day.

I never use the credit card unless it is the only way I can make a purchase. We live very much on a pay as you go basis. When the credit card bill comes, it gets paid. They don't make any money from us apart from merchant fees.

Fuck 'em. They never did US any favors.

[Blue_In_AK]

27. We paid off and cut up three credit cards this year,

Chase, Capital One and Bank of America. It's so liberating.

[Catshrink]

30. Maybe the way to stick it to the banks is for

"everyone" to declare bankruptcy and default on their creadit cards. Might also send a message about a bail out for the middle class but then maybe we aren't too big to fail.