Consumer, media and market research firm Mintel recently confirmed what some analysts have been suspecting: America’s love affair with credit cards is on the decline. Instead, consumers are being a lot more careful with their spending, choosing to use a debit card to make many of their purchases. When using a debit card, money is immediately withdrawn from the consumer’s checking account with no payments due later. All the consumer has to do is track withdrawals much as they already do in a checking account ledger to avoid overdrawing their accounts.

Debit Cards Aren’t Always The Best Approach

As with anything, there are draw backs with using a debit card. Some minor, some major. Let’s take a look at what you need to know about using a debit card, particularly if you plan on shifting your purchasing behavior over from credit cards.

Why Using A Debit Card Makes Good Sense – Perhaps the best reason for using a debit card is that you don’t have to carry cash. This is particularly useful if your purchases are being made in the US, though most debit cards are accepted wherever credit cards are used. In most cases all you need is the “Visa” or “MasterCard” imprint on your card to give the merchant the confidence that your card is good. And, thanks to technology, your debit can be immediately confirmed through the same digital device used to make a credit card payment.

Why Using A Debit Card Can Present A Challenge – Most new debit card users find that they must get used to tracking their purchases much in the same way they track deposits and withdrawals from their checking account. This means updating your check registry frequently, something you can do between receiving monthly statements by logging in to your account online.

Why Using A Debit Card Can Be A Bad Idea – If you use a credit card, you have certain protections you may take for granted. For instance, if you have a problem with a merchant such as not receiving services rendered or there is a problem with the item you purchased, most credit card providers offer payment protection at no additional cost. With debit cards you don’t usually have that protection for the simple reason that the bank treats debits just like a check being drawn against your account.

Points Programs May Not Be As Generous

Finally, with a credit card you may be able to obtain other benefits, such as points which can be redeemed for rewards while most debit cards do not offer these programs at least to the same degree. Still, the trend to debit card usage is a good one as consumers take control of their debt and manage their lives carefully with each purchase.

Source: Mintel

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These are stressful times for many consumers who are finding it difficult to keep up with their bills and manage their debt. For some, the only way out could be personal bankruptcy, an option being considered by as many as one in nine Americans, according to a survey conducted by FindLaw.com.

The number of consumer bankruptcy filings has nearly doubled in the last three years, from 573,000 in 2006 to 1,064,927 in 2008, according to the National Bankruptcy Research Center.  In addition, the FindLaw survey revealed the following about what Americans are doing regarding their own finances:

• Ten percent of Americans say they have considered filing for personal bankruptcy at some point in their lives.

• Two percent of Americans say they have actually filed for personal bankruptcy at some point in their lives.

Tags: credit, debt, discharge debt, finances, Loans, money, pesonal bankruptcy, student aid

Do you feel as if you're in a money trap? Well, you're not alone. Lots of people are finding themselves in debt, but you don't have to stay there. Five tips to help you take control of your money and live a fuller, more enjoyable life.

We’re in a recession, we’re not in a recession. Depending on who you listen to and what barometer of measurement they use, we’ve either been in a recession since December 2007 or the country is still on the outside of one looking in. Perhaps we’re somewhere between the two.

Regardless of what the experts say, what it all boils down for the average consumer is where they’re at financially. Some people are employed and expecting bonuses this month, others are holding onto a job and facing a pay cut, salary freeze, or even the threat of losing employment, while still others are unemployed and are now looking for work.

For every consumer, controlling personal finances is the key to monetary health, a way to build up wealth and an important strategy in gaining independence. After all, if you’re in debt then you basically are owned by your creditors. And, forget bankruptcy as a viable option – changes to personal bankruptcy laws a few years back has made that a bad option for most people.

What can you do to get your debt under control? Several things including the following:

Pay off credit cards – Lots of people are carrying around credit card debt and paying big bucks in interest each month. If you are running balances on several cards, try not to add additional debt. Pay off the card with the smallest balance first and then use those funds to attack the next largest balance. Your debt repayment will “snowball” as you knock out one increasingly larger balance at a time.

Renegotiate interest rates – If your credit cards charge high interest rate and you cannot get a new card with a low rate (to transfer balances) consider asking your credit card issuer to lower your rate. Be careful if you ask for a “hardship rate” where your interest will be knocked down to zero in exchange for automatic monthly repayments – some card companies report this information to the credit bureaus which can adversely impact your credit report or score.

Pay down your mortgage – If you have a home equity loan or a mortgage (or both) work toward paying these debts down faster. Housing prices have dropped, a lot of homeowners have negative equity in their homes, and if you should need to sell, you’ll have more profit to show if your overall home debt has been reduced.

Trim spending – Whether laid off or on the receiving end of a salary drop, you’ll need to trim expenses accordingly. Now is the time to shop around for the best deals on insurance, communication, food, etc. in a bid to keep your expenses in line with what you make each month.

Take charge – Banks and other lending institutions are clamoring for consumer dollars, especially ever since credit has tightened. Make sure that you aren’t paying an annual fee for a credit card, that monthly bank fees are reasonable, and certainly don’t agree to pay other charges which are unreasonable. Threaten to take your business elsewhere if the lender won’t budge.

Some analysts are suggesting the current economic climate will last until next summer with others suggesting that early 2010 will be the soonest date when we’ll see some relief. No one can say for certain when the economy will improve, but don’t wait to act: you can take control of your finances today!

Adv. – How about a card you need that fits your financial objectives? Whether you are a savvy consumer or first-time user, there is a credit card that will meet your buying-power needs. Please visit nBuy.com to conduct your smart credit card search.

Photo Credit: Nusrin

Tags: credit, Credit Cards, debt, Debt Consolidation, employment, job, job loss, money, personal finances, recession