Will You Use a Credit Card More or Less in 2009?

Recently, Bankrate conducted a survey, asking consumers how their credit card usage might change in the coming year.

50% said their use would not change at all; 1% said they expected to charge more; and 32% planned to charge less. A whopping 15%, however, said they would not use their credit cards at all in the coming year.

This is in keeping with a trend among American consumers to cut back and attempt to get out of debt - the exact course of action recommended by financial advisors in spite of Washington's plea that we all spend more.

On the other side of the issue, financial analysts are expecting credit card debt to rise this year as more consumers find themselves out of work and unable to keep up with basic monthly obligations.

This prediction is no doubt the thinking behind credit card issuers' decision to lower credit limits for even their best customers. It is probably also the reason why some credit card issuers are now tracking their customer's spending habits. Too many grocery purchases seem to signal declining income and a possible future default.

Whether you plan to charge less - or not charge at all - you know that your plans could be changed by the economic conditions around you. The one thing certain about this year is that nothing is certain.

That means it is in your best interest to have that credit available, even if you have no plans to use it.

If you already have credit cards, keep them open by charging a small amount occasionally and paying the balance when the statement comes in. This not only keeps the account open, but creates a good record on your credit report.

If you don't have credit cards, now is the time to get one or two and use them carefully, for 2 reasons:
A credit card could be the safety net you need in the event of a job loss or a decline in income due to wage cuts being made across the country.
Wisely used credit cards will help build your credit score.

If you are among those fortunate consumers who are in a position to take advantage of low home prices combined with low interest rates, a high credit score will serve you well. The higher your score, the lower the interest you'll pay on that home mortgage.

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