Half Of Americans See Credit Card Rates Increases

Rasmussen reports on a fun and informative poll of credit card consumers today. They found that 50% of respondents have seen their card interest rates increase in the past six months. And the number really might be even higher, as an additional 19% weren't sure whether their interest rates have gone up. This speaks to the complaint that banks have been raising interest rates in response to last spring's credit card regulatory changes. The poll also reveals some interesting aspects of consumer behavior.In the poll, Rasmussen also found:

Sixty-nine percent (69%) of adults say an increase in the interest rate on a credit card makes them less likely to use that card.

And yet:

But then 51% of adults say they pay their credit cards in full each month, thereby avoiding any interest payments.

Huh? If 51% aren't paying those interest rates anyway, then only the other 49% should much care. That means a sizable portion -- at least 20% of the 69% who say they will use a card less -- have no reason to curb their use. Credit card companies might find that 69% statistic troubling -- depending on the breakdown. If it turns out that more convenience users (those who pay in full each month) make up that 69%, then that's actually good for credit card companies, since they don't make much money off those cardholders anyway. But if most of that 69% consists of those who like to maintain a balance, then that means less interest and fee income. There's also some good news from the poll:

Only 16% say they are carrying more credit card debt than they did a year ago. That's down five points from December of last year. Thirty-four percent (34%) say they have less credit card debt now, and 46% say their level of debt is about the same.

That's an encouraging trend -- especially at a time when many consumers are squeezed due to employment troubles. It indicates that many consumers are using credit more responsibly, even in the face of economic hardship.

This article available online at:

http://www.theatlantic.com/business/archive/2009/11/half-of-americans-see-credit-card-rates-increases/30346/