The growing use of plastic for payments in America -- at not only McDonald's
A recent Wall Street Journal article noted another milestone passed in the march of charge cards toward total world domination: "For the first time, Americans used cards -- credit, debit and others -- to buy retail goods and services more often than they used cash or check in 2003." Now that plastic appears to be vanquishing cash, what's next? Checks, it seems.
Research from our friends at the Federal Reserve confirms the matter, revealing that "The number of electronic payments, including credit cards and debit cards, last year topped 44 billion, more than the number of checks paid, nearly 37 billion."
Why is this happening? There are several reasons, such as:
- Convenience. Why drag around a checkbook, which is a lot bulkier than a credit card? Why write out the payee's name, along with the date, payment amount, and more, when a simple signature will do for a credit payment (and sometimes even that's not needed)? Why not take advantage of a brief "float" period, between the time you charge something and when the credit card bill arrives?
- Perks. Open a checking account and you might receive a toaster or set of gardening tools, but that's pretty much it. Use certain credit cards, and you can enjoy a host of perks, such as air miles and cash back. Many charge cards also offer additional consumer protections.
Using credit cards isn't just a walk in the park, though. There's a dark side to them: Let your purchases get out of control and you'll end up in a death spiral of debt. Major credit card issuers such as MBNA
Learn much more about the credit card industry and how to manage debt effectively in our Credit Center. And read about all things credit-related on our Consumer Credit / Credit Cards discussion board.
Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article.
