Growing Numbers of Credit Card Holders

Accepting credit cards is becoming a must for small businesses and entrepreneurs in today's competitive business environment. There are numerous social, demographic and technological factors combining to make plastic a major mode of payment for increasing numbers of people.

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It is found that an average American cardholder has roughly four bank credit cards. Survey reveals that Credit card processing volume has been expanding about 15 percent per year for the last five years, or three times faster than the increase in overall U.S. purchases. It is also found that Debit card purchases are growing even faster, at more than 50 percent per year. Credit and debit cards are expected to account for 33 percent of all purchases by 2004 and for 43 percent by 2005. According to one estimate, businesses forfeit up to 80 percent of consumer impulse buys if they don't accept credit cards.

Reasons for the Popularity of Credit Cards
To understand the growth in credit card use, it's important to grasp the reasons for their popularity. Consumers typically use cards because:

1. They don't want to carry cash
2. They want to save cash in hand
3. They are making a large purchase
4. They want to gain loyalty points
5. They are looking to float money in a bank account
6. They are making a reimbursable purchase for a company