In what is being seen as the most fundamental change in economic outlook since the Great Depression, consumers are shifting to a "pay as you go, live within your means" financial approach, according to the results of the newest research from Market Strategies International, a global market research and consulting firm.
Results of Market Strategies' Consumer Financial Outlook study, conducted September 23-29, indicate a fundamental shift in the consumer mindset unlike anything seen in the past 80 years. Most notably, consumers are using cash, debit cards, PayPal and other electronic cash transactions and weaning themselves off of credit card usage in unprecedented levels.
"Nearly 40% of all consumers report their usage of credit cards has decreased in the past six months," said Mark Willard, senior vice president of Market Strategies' Financial Services Division. "And nearly 25 percent of consumers indicate that they are likely to stop using their primary credit card altogether in the next six months."
Among the reasons given for the move away from credit are a change in income (48 percent), changing interest rates (18 percent) and a decrease in credit limit (7 percent).
Access to new credit is seen as a problem as well.
"Our study shows that those who need credit can't get it," said Willard. "Twice as many consumers applied for credit cards in the past six months as did in the first quarter of 2009, but the percentage of those who were not approved has continued to grow with more than a third reporting to have been declined."
Market Strategies' Consumer Financial Outlook study was conducted online using the uSamp online panel, with 2006 respondents from U.S. consumers between the ages of 21-70. The data were weighted to reflect the U.S. Census demographics.
