When I checkout on Amazon.com I can use my own bank credit card or I can apply for the store's credit card with rewards. Like many, I choose to use Amazon's. I also use JC Penny, and Best Buy for the same reason. Many times, I want to pay cash or send a check. These are not options on the websites when checking out. The checkout is intended to profit on high interest rates for cards used for a specific purpose. I believe that these cards use their monopoly power to extract high interest rates from their users whose demand is relatively inelastic.
Online commerce now makes up about 33% of transactions. I believe that businesses use the checkout process to get you to pay a little bit more with the use of their credit card. Since many more consumers are buying online, it makes sense to me that the number of credit cards per person and debt on these cards are so high.
This site, has some outstanding statistics.
Debt as pct. of income
- The average credit card-indebted family in 2004 allocated 21 percent of its income to servicing monthly debt compared to the 13 percent dedicated to debt payments among all households. (Source: Demos.org, "Borrowing To Make Ends Meet," November 2007)
- In 2007, the average balance for those carrying a balance rose 30.4 percent, to $7,300. Meanwhile, the median balance -- meaning half owe more and half owe less -- for those carrying a balance rose 25.0 percent, to $3,000. These increases followed slower changes over the preceding three years, when the median increased 9.1 percent and the average climbed 16.7 percent. (Source: Federal Reserve Survey of Consumer Finances, February 2009)
Read more: http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php#ixzz1v8BqIwB6
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