Summary:
Canadians consumers who lean towards a certain payment method prefer credit and debit cards more. On the other hand, cash is now being ignored and used less frequently. A survey that has been released by Ipsos indicates that people who hold at least one credit card show that 34 percent of people polled to be using a debit card for over-the-counter transactions more than the credit card or cash payers combined. It was polled that 25 percent of the people they had surveyed preferred to use credit cards. Meanwhile, only 1 out of 10 people used cash more than debit and/or credit cards combined; while the rest used a mixture of payment methods. It was discovered that people who were heavy credit card users would use them more than twice the average cardholder in both value and frequency. The cardholders seemed to favour using their credit cards at grocery stores. On the other hand, small purchases were paid with either cash or the debit card. Stated by John Mohler, associate vice-president with Ipsos, “This indicates growth potential for credit card use.” Although numerous sums of consumers are concerned about money management or spending control issues with the credit card, a small minority feel the opposite and believe that the credit card will act as a tool to help manage spending and save them money in the future.
Connections:
A majority of consumers who favour using credit cards compared to the other methods of payments is a benefactor to merchants. They will be able to receive quick payments for the credit card sales and won’t have to worry about collecting the money owed from the customer later on. I find that the consumers who believe that the credit card will act as a tool to help them manage their spending are right to an extent. Why do I agree with the consumers? It’s because the bank doesn’t provide the credit card service for free. They will charge you transaction fees or annual fees to the cardholders. It doesn’t just end here with the charges, it will also charge you interest if you are unable to pay off the overdue balance on the card. However, a free method of managing your account is using the passbooks that the banks provide to check your balance. This will put a halt to the compulsive shoppers who want to save up; because of the small charges here and there for every item they buy which will accumulate in price.
Reflections:
Credit cards are handy and convenient to use because of the little space it takes up in your wallet and it weights close to nothing, and of course are great for emergencies when you don’t have enough cash on you. As the article stated that the heavy credit card users would use the card double the average cardholder In value and frequency, it is also a bad thing because certain consumers aren’t disciplined in their spending budget and will assume that because the items they bought will be on credit they have time to earn money to pay for it when the bill comes. Inevitably if this pattern continues consumers all over the world with this habit are doomed to struggling to meet ends meet and living off pay check to pay check without any extra money for savings. This is a life I would not want for myself, personally I think that I would be the type to only use my credit card for large purchases because I want to avoid unnecessary service charges.
The article you picked to blog about was quite interesting. You can't argue with statistics, 34% of consumers must know what they're doing, using debit seems to be becoming increasingly popular. I can understand why people prefer these thin plastic cards a little more than their brother the credit card. Like a mother, we love all our children, but we can't help but have a favourite. Although they are both lightweight and easily portable, the difference between these two is the basis of which it stand, money. With credit cards you are spending money that you might not have. The economy may be recovering, but people are still cautious with their money. Consumers are not willing to pay more, especially not on interest. Debit is a safer way to spend, at the end of the day, you'll rest easy knowing that you can only spend what you have.
ReplyDeleteThis article truly concerns me as it hits us with the reality and statistics of our country's economic state. It's truly a shame how most of our economy is revolved around a piece of plastic rather than liquid cash. As this article reveals,only one out of 10 Canadians rely on cash to make purchases. This means that there is actually very little cash circulating in our economy which can result in being very harmful in the long run. I think that people should really cut down on using their credit cards so often and depend more on cash because that would avoid endless debts and interest fees on owed amounts, along with creating a stable economy that is not just based on credit , but real money; cash.
ReplyDelete