Could credit cards be losing their appeal?

Studies have shown that people these days are more likely to opt for home loans rather than spending on their credit cards. Although debt is constantly on the rise, it is thought that credit card borrowing dropped during 2006 by a massive £1.8 billion. It seems that people are more interested in borrowing a mortgage and whilst the £1.8 billion drop is great compared to the £66.8 billion increase in mortgages, it is still not great!

It is thought that it is the high interest charges that credit cards charge which puts people off these days. They would much prefer to release the equity in their homes and actually purchase new homes rather than get themselves into debt through credit cards. However, that isn’t to say that everyone has stopped – credit cards are still a big problem, it is just that they are ultimately less popular than they used to be.

The amount of borrowing options available to the consumer is endless these days and that could be another reason why credit cards are down. It also seems that many credit card companies have stopped offering 0% interest for certain time periods and that is one of the main reasons many people chose their cards in the first place. Obviously the credit card companies were losing money by offering those deals and they had to drop the offer, otherwise it was just a poor marketing decision on their part. Whatever the reasons credit cards are slowly on the decrease but the debt problem still remains.

With credit card companies less than likely to gain back their ever falling customers, will we see an end to credit cards in a couple of years? It is doubtful but only time can tell. Who knows, there might even be newer ways in which to pay for our purchases by then.