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One in 10 Americans has given up on or lost the use of credit cards in the past eight months, according to a new CreditCards.com poll. It’s dramatic evidence that huge numbers of consumers are voluntarily giving up cards to lighten debt loads, while others have had their cards yanked involuntarily as card issuers watch the recession roll on and new restrictions approach.

Some 29 percent of poll respondents reported that they do not have a credit card, according to the scientific poll, conducted Feb. 5-7, 2010, for CreditCards.com. That was a sharp increase — more than 10 percentage points — from the number of respondents who reported having no credit cards in June 2009 (19 percent).

GIVING UP ON CREDIT CARDS In June 2009 and Feb. 5-7, 2010, CreditCards.com asked a representative sample of Americans what unilateral action their issuer had taken in the past 12 months. Card issuers have continued to take negative actions and trimmed back on positive ones. In addition, the number of people reporting they had no credit card had jumped sharply, from 19 percent to 29 percent.

The poll also shows card issuers have continued to raise interest rates, slash credit limits and impose other changes on millions of account holders in advance of extensive new restrictions that take effect Feb. 22 as part of the Credit Card Accountability, Responsibility and Disclosure Act (the Credit CARD Act).

“When the banks realized that they may be losing revenue due to the CARD Act, they began getting their own ‘act’ together to make changes in advance,” said Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling, a group of nonprofit credit counselors.

“They raised APRs [annual percentage rates], lowered credit lines, added fees and totally closed some accounts,” she said. “Their customers got mad and decided to walk with their pocketbooks and cut back on using credit cards.”

Newly frugal

Other factors behind the swift decline in credit card users: Many Americans are becoming more frugal — buying less, paying with cash or debit cards, and trimming their debt loads. In 2009, Americans have shed $91 billion from their total credit card debts, according to Federal Reserve data.

“The first piece of advice we give people in financial distress is to stop charging and that appears to be exactly what they did,” Cunningham said. “Even those who were still employed realized they could be next, so they also began cutting back on spending.”

Furthermore, many credit card issuers are thinning their customer lists and tightening credit card lending standards.

“Many people had their accounts closed by the issuer, some closed the accounts themselves because they were mad at the issuer and others kept the cards but are choosing to not use them,” Cunningham said.

‘Changing regulatory environment’

Peter Garuccio, spokesman for the American Bankers Association trade group, said the banking industry has been responding to losses caused by a rising number of consumer defaults on their credit card debts and to “the changing regulatory environment.”

“The Credit CARD Act is the most sweeping reform of the industry since the invention of credit cards,” Garuccio said. “It essentially limits the ability of card issuers to adjust prices to reflect changes in customer risk and changes in the broader economy — taking what used to be short-term revolving credit and turning it into medium-term revolving credit.

“When the new rules take effect later this month, card issuers will no longer be able to change interest rates on cards for the first 12 months of a card relationship and will be prohibited from changing rates at all on existing balances,” he said. “Thus, card issuers’ ability to use risk-based pricing has been severely curtailed.”

The poll question

The CreditCards.com survey asked the same question the same way in June 2009 and February 2010. It asked consumers: “Have credit card companies done any of the following with any of your credit cards in the past 12 months?” The choices were:

Your credit card limit was increased.

Your interest rate (APR) was increased.

Your credit card limit was decreased.

Your card was switched to a variable rate.

You were offered an incentive to close your card account.

You were asked to submit a pay stub or tax return in order to qualify for a credit card.

The first item tends to be seen by consumers as positive: An increase in the limit makes more credit available to the consumer and tends to increase the consumer’s credit score. The other five events tend to affect the consumer negatively because they make credit tougher to get or more expensive.

Most common change: a rate increase

When you look at all changes, the pace of change picked up between June 2009 and February 2010. In June, 42 percent of all credit cardholders said they had been notified of one or more unilateral changes to their credit card agreements during the past 12 months. Most recently, 48 percent said that such notifications had arrived in the previous 12 months.

One change in particular showed up more often in the February survey: 38 percent of cardholders reported their card issuer increased their interest rate (APR) in the past year. Last June, 30 percent of cardholders reported such an increase.

The conversion of accounts from fixed interest rates to variable interest rates, was reported by 13 percent of cardholders.

Consumer advocates say it is in the banks’ interest to convert customers to variable rates because the new law prohibits hiking of interest rates on existing balances except if the card carried a variable rate or a promotional rate or if the cardholder falls 60 days behind in payments.

Garuccio, the bank industry spokesman, noted that most cards already carry variable rates and such rates are tied to an index “that is completely out of the control of the card issuer.”

On the bright side — sort of — 30 percent of credit card users said in the current survey that their credit limits had been increased. That gives those customers more leeway, but it also allows them to amplify their debt loads. Such generosity became rarer, though: In the June 2009 poll, 33 percent reported getting a credit limit boost.

Experts unanimously said that the upcoming federal credit card reforms will help virtually everyone who still carries a credit card and consumers should become familiar with those provisions. A survey released Feb. 9 by the Consumer Federation of America and the Credit Union National Association showed that most Americans do not have a clear and accurate understanding of the new law.

No wonder: They’ve been inundated by changes, said Bill Hampel, CUNA chief economist. “Given the significant volume of mailings consumers have received from credit card companies and the number of of pages that are in those mailings, actually knowing what changes are involved is no trivial feat.”

Noting the drop in credit card use and the reduction in consumer debt loads, many experts are wondering what the future will hold. Does this bode a permanent change in American attitudes toward debt? Or is the new frugality just a fleeting phenomenon?

“This begs the question of how long will the consumer stay fearful mad at the banks?” Cunningham said. “If the economy turns around, will they begin charging again? Or will the newfound frugality of only spending what you can pay for become their lifestyle?

“What will this do to our overall economy? If you believe that the consumer is the engine that drives our economy and the consumer is not spending, where will our economy get its much-needed jump start?”

Poll methodology

The 2010 survey was conducted from Feb. 5-7, 2010, by GfK Roper Public Affairs & Media on behalf of CreditCards.com. Random digit dialing phone interviews were completed with 1,004 adults 18 years old or older. The 2009 survey was conducted from June 26-28, 2009 among 1,004 adults 18 years of age or over. The raw data were then weighted by a custom designed computer program that automatically developed a weighting factor for each respondent, employing five variables: age, sex, education, race and geographic region.

The survey had a margin of error of plus or minus 3 percentage points on the full sample, and a plus or minus 3.5 points on the subsample of credit cardholders.

See related: A guide to the Credit CARD Act, Card issuers maintain tightened credit card lending standards, Is the new frugality just a fleeting phenomenon?Card issuers offer incentives if you’ll just go away