Coming Credit Card Industry Collapse Crisis

There is a coming credit card crisis. I just saw a headline that Verizon and AT&T are now requiring debit cards to receive the full autopay discount. This is just a sample of the things to come.

The big credit card companies have just raised their processing fees again so that it costs more for a merchant to handle your credit card sale. They pay every time they swipe a credit card.

Debit cards cost less to process than credit cards, and now-a-days they can often be used everywhere that credit cards can be used. They serve the same function, but they are cheaper for businesses to accept.

So, tell me why a business would ever take a credit card now or in the future???

To top it all off, where I am at least, it has just become legal to pass the credit card processing fee on to customers. Every sale that is paid for with a credit card gets 3-4% added to the bill to help pay the credit card processing fee.

So, tell me why a customer would pay with a credit card???

Credit cards are basically finished. Watch as that industry collapses in the coming years. A lot of money-making potential is just going to leave the world forever. How will a lot of people survive? It will be a crisis.

 

Credit cards are essentially loans.

 

We pay cash for our mom and pop local shops, as often as possible. We get excellent CC benefits from Amex, though. The card more than pays for itself, as long as we stay vigilant about paying our run rate off every month. I’m not getting rid of our Amex bennies anytime soon.

 

Free loans, when done right.

 

People, including myself, don't use debit cards because, unlike credit cards, they essentially offer close to ZERO consumer protection in case of card number theft or identity theft. I don't see how this will change.

 

I have never had a credit card but I do have a debit card and I only keep less than $1,000 on it at any given time basically just to pay my auto pay phone bill and car insurance.

I keep the bulk of my money and savings. And I always keep cash in my pocket but no more than I might want to be robbed at at any given time. Keep a couple hundred dollars in your wallet and maybe about a thousand at the house and the rest in the bank.

I don't understand people that walk around with debit and credit cards but yet they don't have so much as a damn dollar bill in their wallet.

 

People who rely on credit cards for their survival aren't going to stop using them because of merchant fees. A new issue credit card is running around 25% APR and some are over 30%. What will happen is that issuers will phase out the cash-back benefits to bridge the gap.

 

My wife and I buy virtually everything with credit cards. We pay off the entire balance every month. We are not the only people who do that. There will always be credit cards, but the issuing companies will have to be more selective in who gets them.

We get credit card offers regularly. All of those offers go in the trash. Taking out too many credit card accounts hurts you credit rating. For some people it offers opportunities to borrow more money, but that can’t go on for ever.

 

I don't think credit card companies are going to impose fees that might put them out of business. Want to take a stand against these practices, don't use credit cards.

 

Debit cards that require a PIN or a cell phone response are safer than credit cards IMO. Overseas DB's can earn points just like CC's do.

What I suspect is about to happen is EFT's as a replacement for CC's. All that is needed is the bank account #, name of the account and the amount in order to transfer funds directly from one account to another. This is a commonplace alternative where few people earn enough to own any kind of CC.

 

As long as credit card companies pay me thousands of dollars a year to use them I will use them.

 

+1 me too. I have cards that have rewards in the form of cash back, or airline miles, etc. I pay for EVERYTHING with them, and pay off the entire balance immediately upon receiving the monthly statement. I pay no fees or interest on any of them. There is a right and wrong way to use credit cards

 

Yup

 

It’s easier to not lie to the dozen “homeless” people on the way home. “Sorry, I don’t carry cash.” It’s true. If we’re going somewhere we need cash, we just grab some. We always have plenty at home.

There’s nothing honorable about only ever using cash, though some like to view it as the enlightened path. We actually make money using our Amex, even with the hefty annual fee. We still come out ahead.

Last year, our Amex fee was around $600. The paid us back approximately $1,200 in bennies. This doesn’t count the intangibles, like access to the fancy airport lounges, or super late checkout at hotels, which are a nice bonus.

 

Debit cards do not have the protections that a credit card does. I once purchased airline tickets for my family for a trip to Hawaii on an airlines that went bankrupt, because I used my credit card, rather than a debit card, I got an immediate refund, just for the asking.

 

I simply prefer cash, easier to keep track of when something physical and real is in front of you.

Credit will put you in debt, cash never will.

I never hesitate to tell a grown and able bodied man to get a job if they try panhandling on me.

 

Well get it while you can. I suspect the cash back will go the way of paying people hundreds to switch long distance carriers back in the day. Eventually something will happen to cause them to say no more.

 

Title of thread is the news-flash of the day. lol

 

I never understood why people get credit cards. Don't spend money that you don't have. It's a pretty simple concept, and one that has kept me debt-free for 48 years now...

 

You’re Dave Ramsey???

I joke, many live by that simple rule and prosper.

 

It's worked pretty well for me. I've never had a credit card. I don't even have a checkbook. No student debt as I served in the Army and used my Army College Fund and G.I. Bill to pay for my education. I pay cash for the things I need and I don't buy things I don't need. If more people did that, they would be in much, much better financial shape. But, that's not the world we live in. We live in a world where everyone thinks they need to have the newest thing, a new $1,200 iPhone every year (even though it's exactly the same as the one they bought last year), and a $17 soy mocha latte at Starbucks every morning...

 

I don’t give a **** about keeping up with the Jones’… but I did need a good credit score to buy/mortgage my house with a conventional loan thru a bank that won’t sell the mortgage.

 

That's understandable. I'm the type of guy that only keeps 2 bowls, 2 plates, 2 cups, and 2 forks in my kitchen because that's all I need, and I hate doing dishes. I have a Microsoft Windows phone that I gave $30 for at Wal-Mart 7 years ago, and they don't even make it anymore, lol.

 

When you learn to use Linux over MS…. you’ll have it made.

Posted from my 7 year old iPhone.

 

BTW: I’m the type of guy that has 20 different tools that can do the same job…. damn me for trying to have the best tool for a job when I could make a spoon or fork work