More people are ditching their credit cards and opting for a cash-only lifestyle. The sheer convenience of a credit card is enough to convince many people to get one.
But in today's ongoing financial crisis, some in the industry say the hassle of following a strict budget without credit cards trumps convenience.
It seems more people are foregoing the cards and turning to cash. The news comes as no surprise to one credit counselor. Cathy Jacobson of Consumer Credit Counseling Service says, "more people are focusing on mortgage payments, car payments, and credit cards are not a necessity."
Good thing, too, because certain blips showing up on your credit report, like one late payment, a broken cell phone contract, or unpaid utility bills, could cost you a mortgage or car loan.
However, credit reports are partly to blame for the crisis on Wall Street. Campbell Burgess, CEO of Herring Bank says, "Wall Street has lent largely on credit reports and it's clear Wall Street is over extended."
Burgess, though, points out one crucial fact:"credit fuels the economy and we have to have credit for the economy to survive."
That is why Jacobson recommends using credit cards, just not going overboard. She says, "do not have 10 department store cards or 10 gas cards. Just have one for emergencies and don't live off of them."
Today, Americans hold more than $850 billion in credit card debt.