Credit card use may be falling out of favor with American consumers, results of a new survey by global payments Fintech GoCardless suggest.
Three out of four respondents (76 percent) would like to decrease their credit card use while 77 percent prefer debit cards to credit cards. These trends are even higher among younger demographics, with 84 percent of people aged 18-40 wishing to decrease their credit card use and 87-89 percent preferring debit over credit. While 70 percent overall prefer no-interest installment payment providers over credit cards, this number doubles from 43 percent of people 57 and older to 87 percent of those 18-40.
Most Americans (63 percent) said they are less likely to use credit cards now than they were before the pandemic began. This rate rises to 74 percent for 25-40-year-olds and 76 percent of those aged 18-24.
The most common reasons for shunning credit are fears of debt, fear of the inability to pay monthly balances, and concerns about even being able to pay the minimum payment.
“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, cofounder 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.”