Staying frugal – positive for consumers, not so... - Other News

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » Staying frugal – positive for consumers, not so for companies

Staying frugal – positive for consumers, not so for companies

Staying frugal – positive for consumers, not so for companies
The content is accurate at the time of publication and is subject to change.

Branding executive John Gerzema says that the changes brought by the economic recession in terms of making cardholders more “cautious, frugal, and tactical” are part of a “massive cultural event for our society”.


Working for marketing and advertising firm Young and Rubicam and the co-author of a new book which explores the ways by which people change their spending habits, Gerzema says that the changes in consumer practice behaviors will be positive in the long run. On the other hand, he says that there are also realities that the credit card companies face which include the different credit-card debts incurred by their cardholders during the recession.


Gerzema says that rate of savings was insignificant at nearly zero percent with the economic downturn. The cardholders have incurred debts everywhere their households, credit card and mortgage obligations, etc. Their debts were at 40 percent higher than their incomes and the figure doubled from the same period of July to September last year.


Hartman Group vice president for strategy and innovation Jarrett Paschel said that Americans felt the need to spend more during the recession for their own compelling reasons despite the instability of their economic condition.


During the recession, increase in housing prices has made millions of Americans financially burdened which may have also compromised their spending for necessities.


Although a group of academic economists at the National Bureau of Economic Research said that recession already saw its end. The Conference Board consumer index shows that not even the slightest majority of Americans are feeling the recovery with confidence levels around 40 to 50 percent only.


The Conference Board shares that consumer index confidence levels reaching 90 percent means a healthy economy and the last time this figured showed was in December of 2007, the month of the recession’s onset.


With the impact of the global economic recession, Paschel pointed out that no one can be very optimistic or overconfident yet.


An economy finally taking flight would mean credit card companies also being able to recoup lost investments during the recession as well as individual consumers now paying off more responsibly on their credit card debts.


Paschel then concludes that for the credit card companies not to have a financial shortfall, the debts of credit cardholders, who have at least showed progress in their economic management this quarter, hopefully will pay off their balances sooner rather than later.


This is also for the account owner’s benefit, Paschel concludes.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

USTA Welcomes Bill to Expand TSA PreCheck Enrollment
USTA Welcomes Bill to Expand TSA PreCheck Enrollment

Posted: May 23, 2019

The TSA PreCheck program that allows pre-cleared air travelers to pass through airport security more quickly could be expanded if new legislation is passed. Continue reading

Credit Card Borrowing is Up among Millennials
Credit Card Borrowing is Up among Millennials

Posted: May 20, 2019

In the past millennials had fewer credit cards in their collective wallets, but things are changing according to the Federal Reserve Bank of New York’s Liberty Street Economics Blog, with over half of people in their 20’s carrying a credit… Continue reading

Three New Credit Cards from Sallie Mae
Three New Credit Cards from Sallie Mae

Posted: May 16, 2019

When people hear or read the name Sallie Mae more than likely they think about student loans because the company has been in that industry for years, but now they are looking to expand their reach and moving into the credit card business…. Continue reading

Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Introducing the New Citi Rewards+ Card - the only credit card that automatically rounds up to the nearest 10 points on every purchase - with no cap
For Excellent, Good Credit
Enjoy 70,000 bonus miles after spending $5,000 on purchases in the first 90 days
For Good/Excellent Credit
See Rates & Fees
Perfect credit not required for approval; we may approve you when others won’t
For Fair/Bad Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!