Originally Posted On: https://www.credello.com/
The credit card industry has been ablaze as the U.S. reopens amid a steady decline in COVID-19 cases. According to the CDC, more than 50% of the total population has received at least one vaccine dose.
The U.S. economy has started to recover, and economic experts predict that the summer will help aid the economy even further. In five states—Florida, Idaho, Nebraska, Rhode Island, and South Carolina—the economies are operating at or above pre-pandemic levels, according to the CNN and Moody’s Analytics Back-to-Normal Index.
With the economy approaching a potential boom, these four credit card industry trends are worth monitoring.
4 credit card industry trends in 2021 and beyond
Buy now, pay later services
Buy now, pay later (BNPL) services have been on the rise for several years, but especially took off amid the COVID-19 pandemic with the increase of online shopping. Affirm, Afterpay, and Klarna are three of the biggest BNPL fintech startups that have made headlines lately. You’ve probably seen at least one of these when checking out during online spending sprees.
Affirm is a point-of-sale lender typically used on larger purchases. It requires a credit check and charges interest, and generally has a longer repayment period.
Meanwhile, Afterpay and Klarna are “pay-in-four” services that don’t charge interest or require a credit check, but they do require a 25% deposit. These services are most often used in retail settings and allow you to make a purchase and split the cost into installment payments over a set period. It’s like the 2021 version of infomercials advertising products for “4 easy payments of $19.95.”
If ‘buy now, pay later’ is your M.O., and you’ve racked up credit card debt because of it, you may want to consider learning how to consolidate your credit card debt. Debt consolidation helps you simplify your bills into one easy payment, and possibly reduce your interest rate and monthly payment amount.
Increased appetite for rewards points
According to the 2020 ACI Speedpay Pulse Study, which surveyed over 3,000 Americans from March to April 2020, more than 2/3 of consumers said they made a one-time credit card purchase just to earn rewards.
With the decline in travel throughout most of 2020 and into 2021, travel rewards cards weren’t as appealing to consumers, which is why many credit card issuers have implemented more flexible options to redeem miles or points.
Virtual card numbers
Virtual card numbers, also called masked credit cards, are unique, disposable credit card numbers that allow you to make online purchases more securely by not sharing your actual credit card number.
With services like Capital One’s Eno, you can use a browser extension to log in to your account and either create a new virtual card number or select one for a particular retailer.
This is similar to services like two-factor authentication, where you receive a one-time PIN to log in to your account.
Credit card usage has surpassed cash, especially as COVID limited contact, and now contactless credit card payments could become the norm.
With tools like Apple Pay and Google Pay, consumers can use their mobile devices or wearable devices, like Apple Watch and Fitbit, to check out at retailers that have installed contactless payment systems.
In addition to offering convenience, these systems also are more secure than swiping or inserting your credit card as the information is transmitted using RFID technology and encrypted.
Reduce ‘phone, wallet, keys’ down to ‘phone, keys’: There’s no need to worry about forgetting your wallet anymore as long as you have your smartphone (or smartwatch) on you.
- CNN/Moody’s Analytics Back-to-Normal Index
- ACI Speedpay Pulse Study
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