SAN FRANCISCO (PRWEB) July 21, 2021
After decades of dominance in the U.S., credit cards may be on their way out as alternative payments come to the fore. According to a survey from GoCardless, a global fintech for account-to-account payments, 76% of Americans would like to decrease their use of credit cards. A similar proportion (77%) revealed they are more likely to use their debit card than a credit card for purchases.
The figures are higher among the next generations of shoppers — indicating a permanent shift in consumer preferences as Gen Z and Millennials increase their purchasing power in the coming years. In addition to harboring a distinct dislike for credit cards, both cohorts revealed a striking preference for new forms of payment, including Buy Now Pay Later (BNPL).
Would like to decrease use of credit cards:
- 84%, 84%, 63%, 76%
Would rather use debit than credit cards:
- 89%, 87%, 54%, 78%
Would rather use no-interest installment payment providers (e.g., Klarna or Affirm) over credit cards:
- 87%, 87%, 43%, 70%
*Percentages above correspond to the following age groups, respectively: 18-25, 25-40, 57+, All
Pandemic dampened American enthusiasm for credit cards
A majority of Americans (63%) say they are less likely to use credit cards for purchases now than before the pandemic. This number is significantly higher among Gen Z and Millennials, rising to 76% among 18-24 year olds and 74% among 25-40 year olds.
Of those using their credit cards less due to the pandemic, most are doing so out of financial concerns. Reasons include:
- Wary of getting into debt (46%)
- Fear of not being able to pay off the balance each month (27%)
- Concerns about managing the minimum payment (26%)
“The pandemic put people in tough positions financially, and that likely accelerated the move away from credit cards. But this is part of a larger trend, particularly among young Americans,” said Hiroki Takeuchi, co-founder and CEO of GoCardless. “Alternative payment methods such as Buy Now Pay Later are booming, and Americans are also discovering the benefits of account-to-account payments such as ACH debit, which have been popular in other parts of the world for years. Though they’ve dominated in the U.S. for decades, it’s clear that a seismic shift has started, and credit cards will be obsolete in a generation or two.”
The consumer research cited in this release was conducted by Propeller Insights and GoCardless to highlight Americans’ credit card and payment preferences. The study took place June 25-July 1, 2021, and surveyed 1,000+ U.S. adults, ages 18 and over.
GoCardless is a global leader in account-to-account payments. The GoCardless global payments network and technology platform take the pain out of getting paid for 60,000 businesses worldwide, from multinational corporations to small businesses. Each year GoCardless processes $20 billion of payments across more than 30 countries. GoCardless is headquartered in the UK, with additional offices in Australia, France, Germany and the United States. For more information, please visit http://www.gocardless.com and follow us on Twitter @GoCardless.
© 2021 GoCardless Ltd. All Rights Reserved. GoCardless is a registered trademark of GoCardless Ltd in multiple countries. Third party trademarks mentioned above are owned by their respective companies. Unless explicitly identified as such, nothing in this press release should be construed to the contrary, or as an approval, endorsement or sponsorship by any third parties of GoCardless Ltd. or any aspect of this press release.
Alisha Alvarez for GoCardless
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