By allowing consumption smoothing, credit cards make consumers more likely to spend beyond their means. The credit quality cycle, which mirrors the overall economic cycle, has been exaggerated by the easy availability of credit. Credit cards have certainly increased the ability and temptation for people to spend beyond their means. The relatively high interest rates charged by most credit cards only add to the problem . Despite hurting saving and personal bankruptcies, credit cards have been essential to the increasing efficiency of retailing and of consumer finance.
Credit cards are both a symbol and enabler of our modern consumerist economy.
As electronic payment cards supply cash, credit cards will increasingly dominate consumer spending, further increasing the efficiency of consumer transactions.