According to Marqeta’s 2022 State of Credit report, the credit card market is booming and is up for grabs. The report found credit cards continuing to play a central role in the financial lives of U.S. consumers surveyed, satisfying their demand for convenience, rewards, fraud protection and the ability to pay for purchases over time.
Based on surveys of 2,000 U.S. consumers as well as 2,000 consumers from Australia and the U.K. the study found that 71% of U.S. consumers surveyed use a credit card at least weekly, and 26% of all survey respondents said they pay with their credit card at least daily. While 27% of U.S. respondents say they have one credit card, 38% said they have three or more cards.
That might explain why the total number of credit cards exceeds the number of U.S. citizens. TransUnion’s latest credit industry insights report noted that the number of credit cards topped 500 million in the U.S. for the first time ever at the end of Q2 2022. While Gen Z consumers were credited with spurring the increase, data from Marqeta’s 2022 State of Credit report found growing opportunity within this group. Half of U.S.18-25 year olds said they plan to apply for a credit card in the next 12 months, and 25% said they were dissatisfied with their primary credit card.
Credit cards help close the gap
Consumers are dealing with several challenges that are causing financial stress in their day-to-day lives, including concerns about the economy and inflation levels not experienced in generations. Nearly half of respondents (48%) said their credit card had been a lifeline as the cost of living has surged. That sentiment was especially strong among U.S. consumers. More than two-thirds (67%) of U.S. respondents said that they used credit cards to make ends meet, and half used buy now, pay later (BNPL) options to help stretch their paycheck.
They are also adjusting their spending habits. Over 60% of U.S. consumers said they had already delayed a major purchase. Older Americans are more likely to be clamping down on their wallets than younger consumers, with 81% of respondents between ages 51-65 saying they planned to reduce spending.
Cardholders open to change
With many Americans carrying more than one credit card, it is perhaps no surprise that consumers frequently switch cards. Nearly four in 10 U.S. respondents (39%) said they have stopped using a card in the past 12 months – about the same percentage that said they planned to apply for a credit card in that timeframe (42%). The most relentless switchers are American 26-34 year olds, 54% of whom quit using a card.
Despite this fluidity, 74% of U.S. survey respondents said they are satisfied with their credit card. That aligns with findings from the J.D. Power 2022 U.S. Credit Card Satisfaction StudySM, which found credit card issuers are experiencing sizable gains when it comes to customer satisfaction.
“Strengthening cardholder satisfaction requires delivering what consumers feel are the benefits of credit cards: making their lives easier, getting incentives for purchases, and not having to worry about security,” said Rachel Huber, Senior Market Intelligence Manager with Marqeta. When asked what they believe the key appeals of credit cards are, 39% of respondents said convenience, 38% said rewards and 35% said fraud protection. The ability to pay over time was cited by 31% of respondents.
Rewards not one-size-fits-all
Marqeta’s 2022 State of Credit report drilled down into consumer perceptions about rewards, finding that getting cash back is most popular. Nearly six in 10 (59%) of U.S. consumers rated cashback number one, followed by airline miles and multi-purpose points. Two-thirds (66%) of younger consumers listed getting offers from merchants where they shop as their top reward choice.
The survey revealed opportunities for personalizing credit card incentives and rewards programs. Only 26% of U.S. survey respondents said their rewards were very personalized to their spending habits.
The advent of modern card issuing, available from platforms like Marqeta, has changed where and how loyalty incentives can be used and rewards can be redeemed. Brands can now design custom programs that control spending by merchant name, category, geography, and even a particular time period. Key performance indicators include new sign-ups, increased overall spend, increased spend on high-margin items, and increased spend with partners. Ready to talk to a human about your credit card issuing strategy? We are here to help. Or take a deep dive into the data by checking out the full report.
