Consumers dropping the credit habit

NEW YORK, Feb. 8 (UPI) -- U.S. consumers are turning away from credit cards in favor of debit cards, cash or checks, research groups and the Federal Reserve Bank have said.

The Federal Reserve said recently that revolving debt, which includes credit card debt, fell 20 percent in November compared to November 2008, the sharpest drop since the central bank has monitored the figure, USA Today reported Monday.

Consumer credit reporting agency Equifax said new credit card accounts dropped 46 percent in 2009 January through October, compared with the first 10 months of 2008.

Personal finance author Dave Ramsey said, "There's quietly been a credit card revolution."

The recession has turned some from a free-spending lifestyle to a new appreciation for austerity. Others have backed away from revolving debt to embrace a simpler lifestyle, the newspaper said.

Others are simply angry at the industry for piling on charges or raising rates when they are down on their luck.

"Any time there's even a hint of a financial issue in the consumer's life, the credit card company will raise the interest rate," said Tim McFarlin, a consumer bankruptcy attorney.

"They'll do anything they can to make life as difficult as possible," he said.