As we enter 2023, it’s clear that the way consumers use credit cards is changing significantly. The world of January 2023 is markedly different than January 2022. Waning fears of coronavirus have been replaced with rising fears of a global recession. How will these changes impact how we use credit? Here are some credit card trends to look for in 2023:
A Contactless (and Cashless) Future
One of the biggest trends in credit cards is the shift toward cashless payments. With the rise of mobile payment apps like Apple Pay and Google Pay, more and more people are using their smartphones to make purchases instead of using cash or credit cards. Younger consumers are most likely to embrace new technology. They are more comfortable using their smartphones to make payments, driving widespread adoption.
Contactless payments were already enjoying a rise in popularity before the COVID-19 pandemic. Still, the epidemic sped up the process of public adoption considerably.
As early as March 2020, polls highlighted a sharp jump in contactless payment purchases. In a poll of 17,000 consumers in 19 countries, over 78% of respondents say they now use contactless payments for point-of-sale purchases. The main reasons for paying contactless were cleanliness and health and safety considerations. Expect this trend to continue as the few remaining outlier credit cards shift towards the common EMV chip.
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Continued Shift Towards Everyday Rewards
Another trend we’re seeing is the increasing popularity of rewards credit cards. These cards offer customers a range of benefits, such as cash back on purchases, points that can be redeemed for travel, and other perks. As a result, more and more consumers are choosing to use rewards credit cards for daily purchases, and this trend is likely to continue in 2023.
Rewards credit cards have also shifted over the last few years, emphasizing “everyday” rewards instead of airline miles or hotel points. These credit cards earn rewards on services like streaming, phone and other utility bills, drugstores, and more.
The Citi Custom Cash℠ Card, Wells Fargo Autograph, and Chase Freedom Flex are examples of cards prioritizing everyday rewards. The Flex, for example, earns 5% back in rotating categories but also provides 3% back on drugstores, and dining at restaurants, including takeout and eligible delivery services. The Custom Cash removes the clumsy rotating cash back calendar, letting cardmembers earn 5% back on purchases in your highest spend category each billing cycle up to $500 spent – meaning no confusing quarterly activations to monitor.
More Business Credit for Small Enterprises
Rewards credit cards aren’t the only type of credit card enjoying a surge in popularity. The gig economy has enjoyed rapid growth since the coronavirus pandemic, meaning more and more people are turning to freelance work and starting their own businesses. As a result, they are using business credit cards to finance their business expenses and manage their cash flow.
This new demand for business credit coincides with a selection of new credit card products for smaller companies and entrepreneurs. Cards like the Revenued Business Card Visa® and Ramp Card provide companies with access to additional capital thanks to unique application processes. Expect the trend to continue in 2023 as more and more small businesses turn to credit cards to manage their finances.
Summing It Up
Overall, it’s clear that the way US consumers use credit cards is changing. The reshuffling of rewards towards everyday spending, plus the broad adoption of contactless payments, will fundamentally alter how we use credit cards in our daily lives. These changes, along with an increasing array of new small business credit products, will likely lead to significant shifts in how people think about credit.
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