4 charts, Member Exclusive

How the pandemic has accelerated the demise of credit cards, in 4 charts

  • U.S. consumers are slashing their credit card use, particularly Millennials and Gen Z.
  • The declining popularity of credit cards among young shoppers could be an early sign of a permanent shift in consumer preferences.
close

Email a Friend

How the pandemic has accelerated the demise of credit cards, in 4 charts

The credit card has a long-standing relationship with the American consumer. It’s certainly come a long way since the launch of Diners Club — the world’s first consumer-facing credit card company — in 1950, and American Express’ issuance of the world’s first plastic card in 1959.

But after decades of dominance in the U.S., the credit card may finally be losing its hold over American finance. The move away from credit cards seems to have accelerated over the last year and a half, thanks largely to (you guessed it) the pandemic and the resulting economic uncertainty, as well as the growing popularity of alternative payment options such as Buy Now, Pay Later.

Customer satisfaction with credit card issuers has seen a visible decline this year, owing to increasing financial uncertainty, combined with factors such as high interest rates, shrinking credit limits, and misdirected rewards programs. Credit card issuers are struggling to meet the rapidly evolving expectations of customers through the pandemic.

“The industry missed the mark on supporting customers’ changing needs when many were facing significant financial challenges,” said John Cabell, director of banking and payments intelligence at J.D. Power. “Whether through tightening credit limits at the very moment when customers were most reliant on their cards for short-term funding, or through a lack of customer service accessibility, credit card issuers experienced declines in overall satisfaction, trust, and brand perception this year.”


This content is available exclusively to Tearsheet Outlier members.

Tearsheet Outlier information and signup Missing out? Subscribe today and you’ll receive unlimited access to all Tearsheet content, original research, exclusive webinars and events, member-only newsletters from Tearsheet editors and reporters and much more. Join Outlier now — only $49/mo. Already an Outlier member? Sign in to your account

0 comments on “How the pandemic has accelerated the demise of credit cards, in 4 charts”

Member Exclusive, New banks

Banking Briefing — January 24, 2022

  • In this week's briefing, we've got Zopa converting to bankism, Current breaking the challenger bank mold, and banks shutting down branches.
  • The look and feel of banks is changing, but not always in the most predictable way.
Rivka Abramson | January 24, 2022
Finance Everywhere, Member Exclusive

Embedded Finance Briefing: What’s going on at Marqeta?

  • In this week's Embedded Finance Briefing, we take a deep dive into Marqeta's performance in Q3 2021. We review analyst discussions and the key takeaways from the recent earnings call.
  • We also look at the potential for embedded finance offerings in serving SMBs, and how incumbent banks might be under threat.
Subboh Jaffery | January 21, 2022
Green Finance, Member Exclusive

Green Finance Briefing: Sustainable lending solutions and the rise of climate fintech

  • New innovations in fintech are bridging the gap between financial institutions and understanding climate risks in loan portfolios.
  • We're also looking at startups that have launched over the past few years targeting the intersection of climate risks, sustainability, ESG, investments and banking.
Iulia Ciutina | January 21, 2022
Member Exclusive

Deep Dive: Current

  • Current is a challenger bank with a focus on improving consumers’ access to banking services and financial literacy through technology.
  • Starting out as a teen banking product, building its own core technology, and now diving into DeFi, the company has taken an interesting route compared to competitors.
Rivka Abramson | January 20, 2022
Member Exclusive, Payments

Payments Briefing: B2B payments are slowly catching up with B2C

  • This week, we look at how B2B transactions are going digital.
  • Bar Geron, co-founder and CEO of payments firm Balance, says that B2B ecommerce is following the same trends as B2C – just some years later.
Ismail Umar | January 20, 2022
More Articles