The Bankwatch

Tracking the consumer evolution of financial services

US shoppers turn away from credit according to certain retailers

In the clearest sign yet of impacts on the Banks from the subprime crisis, US consumers are shifting to cash or debit and away from credit cards.

US shoppers turn away from credit

Mainstream retailers are reporting that shoppers are opting for debit cards or cash instead of credit cards as they face tighter credit limits, illustrating how the wider credit crunch is being transferred to main street spending.

However the message is clouded by the fact that while certain retailers are noting the shift, Visa and Mastercard are seeing card usage relatively unchanged.  The shift was first noted by Walmart, and is now followed by Lowe’s, Kohl’s and Target.

It may be that the economic impact on consumers is affecting lower income first.

Written by Colin Henderson

August 28, 2008 at 21:31

Posted in Payments, subprime

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