Side-Stepping The Swipe Card

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Credit card companies like Capital One Financial are traditionally happy to hand out credit cards to customers who like to engage in retail therapy but consistently neglect to pay on time.

Why not be ecstatic when those “over limit” and late fees produce hundreds of millions of dollars in profits in a given quarter for the company?

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But as the Washington Post reports, credit card giants like Capital One a re finding that their customers are spending less and less – and in a rush to pay off their big balances.

Are credit card users finally learning to stop playing with their plastic friend?

Despite those in cyberspace continuing to debate whether or not consumers are spending more or sticking with their newfound frugality, for at least one credit card giant the proof is in the company’s books.

With increasing financial turmoil and conflicting reports on when the turnaround will start, credit card users are submitting payments on time and spending within their credit limits – even if they’ve been substantially lowered.

For those customers without the cash to cover the cost of even the minimum payment required, they’re cutting their losses and letting their balances sail to delinquency. For credit card companies, that loss is shared.

Many credit card companies expect their losses to continue to build as the volatile job market makes those weary to spend. Moreover, with higher interest rates resulting in larger minimum payments, customers have even more incentive to cut back on credit card usage.

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Do you find yourself using your credit card less? If so, how successful have you been in your dabbles in frugality?

I’d love to hear from you, especially those who have to face back-to-school shopping.

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Michael Arceneaux hails from Houston, lives in Harlem and praises Beyoncé’s name wherever he goes. Follow him on Twitter.

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