Consumers, the economy and credit cards

While credit card approvals continue to skyrocket amid low delinquency rates, consumers are not exactly jumping to incur further debt.

While credit card approvals continue to skyrocket amid low delinquency rates, consumers are not exactly jumping to incur further debt. Nonetheless, recent reports have shown consumers are more active in paying off credit card dues than their mortgage payments.

Conditions are pointing to an overall sense of uncertainty among consumers, as unemployment runs amok and wage increases remain flat. In such times, it pays to understand what drives customers to spend.

As far as credit cards go, many consumers are losing faith in their issuers, even as protective measures such as the 2009 Credit CARD Act limit unfair practices and aim to boost credit volumes. Accordingly, many Americans have been turning to the convenience of prepaid cards for specific purchases and payment needs.

"There are just some things that you really have to use with some kind of a credit or a debit card," Erin Dufner, senior vice president of communications for the Central Texas BBB, told the Austin American-Statesman. "So, typically, when we see a slower economy and consumers are unable to get a credit card - sometimes they've maxed out their credit cards and they need a way to charge - this is a great alternative for them."