Sure, Americans have cut back on credit card usage, a little. But Visa, MasterCard and Amex have bright futures just the same.
As we all know, U.S. consumers have been hit hard by this recession. Discretionary spending has dropped precipitously since early 2008, especially as more Americans begin to save. As a result, sentiment has turned against credit card issuers and lenders. But despite this, card companies like Visa and American Express remain poised for huge growth, industry observers believe.
Recent legislation, known as the Credit Card Holders Bill Of Rights, has limited credit card companies’ abilities to change payment dates suddenly and impose retroactive interest rates. These new restrictions are scheduled to go into effect in July 2010. However, credit firms have proactively responded by increasing base APRs and moving most fixed-rate cardholders to floating interest rate cards.
Martin Weiss, chairman of the Weiss Group, believes ongoing fighting between Congress and credit providers is turning off a number of consumers to purchasing goods on credit.
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