Even with a rebound in the economy, many Americans are still using their credit cards just to get by. In a survey by Demos, 40% of low and middle-income households use their credit cards to pay for basics such as groceries, utilities, rent, or mortgage payments. Credit cards are turning into a plastic safety net according to Amy Traub, a senior policy analyst for Demos.
Although the CARD Act imposed many new regulations on the credit card industry, it did not address the need of many Americans to rely on debt to make ends meet. These new regulations resulted in fewer new credit cards being issued and existing lines being scaled back. Demos found that 39% of responders had their credit tightened.
The survey included almost 1,000 low and middle-income households in February and March of this year. The households had to carry credit card debt for three months or more.