Paying with Plastic
This study examines how people use their cards and the reasons for credit card default - and its results do much to dispel the popular image of a credit card defaulter as a young, irresponsible spender. For example:
- credit cards are used most by people in their 30s and 40s, especially if they have children.
- while there are some people who overspend, the main reason for default was found to be loss of income, often through small business failure.
- there are a number of credit card holders who default because they simply misunderstood the system of payment, or are just very disorganised.
- there is no evidence that credit card companies were issuing cards to people who could not afford to use them.
- customers who default are surprised by the relatively sympathetic approach adopted by the credit card company.