A major sign that people are opting for the more affordable short term loans is the reduction in the number of credit card holders. This is a positive indication that amid the global financial crisis that is still far from over, people are finding ways to avoid the use of credit cards as much as possible in meeting their family’s financial needs.

This finding is especially true in Australia. Latest reports have it that credit card spending has gone down in the country. A report from accounting firm PricewaterhourseCoopers (PwC) revealed that in 2009, the rate of borrowing via the credit card went down by three percent while the number of cards circulating also dropped by eight percent.

One of the causes of this reduction in credit card use, as suggested by the report, is the continued low unemployment rate in the country. This situation is also being blamed to the economic downturn around the globe which in turn has caused anxieties to people who fear about their losing jobs.

Owing to this situation, the PwC report projected an increase in credit card write-offs from 3.8 percent to nine percent in the year 2010. This means that financial experts are seeing a greater number of consumers having difficulty paying off their credit card debts. Some of the probable causes of this financial difficulty will be the limitation in the choice of products and a rise in charges resulting from higher interest rates and other related fees.

This reduction in credit card use is a common observation of many experts in the credit industry. The Credit Conditions report from the Bank of England showed the same finding stating that the situation will further tighten until the end of the year.

For people who regularly keep track of their credit card spending and their bills, they may have somehow found or rather they should have discovered by now the high cost involved in using these cards. The cost is even higher if the owner contents himself or herself with just paying the minimum amount due every month instead of paying off the balance in full. In this case, the finance charges normally keep rolling over while if one pays off the balance, no extra charges are usually applied to the total balance. The other good thing about paying the credit card balance in full before the due date is that you avoid incurring any charges which means it’s just like you borrowed money without any interest.

It is no surprise then if people will favor the short term loans such as the cash advance and payday loans today over the credit card. At least with this type of loan, the amount involved is smaller, the term is shorter and the borrower is more capable of repaying the amount using his or her next paycheck. These short term loans are also easier and convenient to obtain compared to the usual loans offered by banks. Many lending companies have put up their respective websites to make it convenient for people to apply and get loans in a matter of a few minutes to an hour.