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STACEY VANEK-SMITH: New rules on credit cards are slated to take effect next year. They'll restrict certain fees and charges. We talked with one of the architects of that legislation, Senator Chris Dodd of Connecticut. He said he's been pushing for something like this for 20 years.
CHRISTOPHER DODD: We've never done anything like this before with the credit card industry. It's the only contractual relationship I know of where one party can arbitrarily change the conditions at any point in the contract.
Still, with seven months to go before the changes take effect, credit card issuers are trying to change some of the conditions -- now. Banks are hitting consumers with higher penalties for late payments, jacking up interest rates and cutting back rewards on those mileage-plus cards.
What's a credit-card user to do? Well, that got us thinking. What would happen if we all just stopped using our credit cards?
Sean Cole imagined such a world.
SEAN COLE: Before we get into what would happen if a lot us stopped using credit cards, we should probably ask whether that's likely.
JAMES CHESSEN: Cause I don't really think it is.
James Chessen is chief economist for the American Bankers Association and, of course, a big champion of credit cards. He says we have to distinguish between people who just dip their toes in the river of credit every month, and those who are drowning in it.
CHESSEN: Fifty-six percent of cardholders don't ever revolve any balance, so there's absolutely no reason why they would stop using it. They're using it for a convenience.
Actually, there is a reason. Some of these cardholders are getting fed up with the banks that issue their cards. People like Mary Grace Dembeck.
MARY GRACE DEMBECK: These were the two letters that I got sent. Now the day that I . . .
Mary's a painter and a children's book author and a grandmother in Connecticut. The letters she showed me were both from credit-card companies. One of them was shutting down and closing her account. She felt kind of bad for them. The other said it was raising her annual percentage rate, out of the blue.
COLE: So what did you think of that.
DEMBECK: Oh, I was incensed, you know? Because I'm on automatic pay, so I've never missed a payment.
And she's been trying to get off the plastic anyway. She's got four or five cards and lately she's looked at them as little enemies, tempting her to over-shop.
DEMBECK: I tried to go out the other day without any credit cards at all, 'cause I think that when I reach that I'll be a success.
COLE: So you're literally trying to leave home without it.
Which brings us back to our original question, what if a lot of Americans, out of anger, or necessity, or just because they feel like it, decide to switch to cash.
ROBERT MANNING: Well, it's incredibly disruptive to the entire national economy.
This is Robert Manning, the guy who wrote "Credit Card Nation."
MANNING: I mean, the more cash that flows through the system, the more personal attention to money flows, the less fees that the banking system will get, the higher the . . .
He talked like this for two minutes straight. And it was interesting. He managed to wind his way from the economic impact to this vision of a total cultural shift.
MANNING: Forcing people to save and plan, and by the time they actually plan and save to purchase an item, they may decide that they really don't need it. I mean, it will be a complete transformation of American society.
And you know how often those happen. Manning says a lot of people still expect everything to go back to normal, so why change their habits.
Of course, it's not like America was always a credit-card nation. Used to be cash was the only option. And some people are still living that way.
People like the legendary country singer Wynonna Judd. For a long time, she was a real spendaholic -- says she lost her fortune at one point. And then she cut up her credit cards.
WYNONNA JUDD: When I go into Target or any of these stores, I pull out my little money envelope, and I hand it over to the girl, and she kind of looks at me like, "You're Wynonna Judd. Where's your, you know, platinum-plated credit card that says the fabulous touring Wynonna Judd of love?"
The money envelope is a thing with her. It has to have bills of every denomination, including a couple hundreds all facing the same way. She was ready to whip out one of the hundreds the other day, at Starbucks of all places. But she stopped herself.
JUDD: And I'm thinking, "Wait a minute, whoa, whoa, whoa, whoa, time out. What am I gonna do with this, this coffee press? I don't press coffee!" And I just remember thinking this is really ridiculous.
COLE: And do you feel like it's because you're carrying around that envelope of money instead of a credit card that you're able to do that?
JUDD: I think so.
So Starbucks loses a sale. Wynonna Judd can still live with herself. It's a mixed bag, this cash-only proposition. And again, there's no telling how many potential Wynonna Judds or Mary Grace Dembecks are out there, trying to leave home without it. Or why they might choose to. Sitting with Mary in Connecticut, I re-read the letter that made her incensed. It actually said they were raising her cash-advance rate.
DEMBECK: OK, so I've never taken a cash advance.
COLE: So you wouldn't really have to worry about this.
DEMBECK: So I shouldn't have gotten upset with them in the first place?
But she's still going to switch to cash only, she says. Using the cards feels likes she's getting something for nothing. And using cash hurts, but at least it feels real.
In Boston, I'm Sean Cole for Marketplace Money.