Americans Feel the Financial Burden of COVID-19, With 65% Relying on Credit Cards to Make Ends Meet as the Pandemic Continues, According to Marqeta’s 2021 State of Credit Report
- Reported use of Buy Now, Pay Later services rose by 27% year-over-year
- 70% of consumers surveyed who have used a Buy Now, Pay Later solution said they see it as a replacement for their credit card
51% of consumers surveyed by
Marqetawere put off by high credit card interest rates
Marqeta’s new survey shows that credit cards are still king, with 78% of American consumers reporting using credit cards and 70% reporting using them at least once a week. With the pandemic bringing on new financial distress, credit cards were also a reliable source of stability for consumers. Over half of consumers said they increased their credit card usage during the pandemic and 65% said they used credit cards to help make ends meet. Credit cards also provided additional layers of support for users, with over two-thirds of consumers saying cash back has been their most valuable reward.
While credit cards helped keep Americans above water, alternative forms of credit continued to grow in popularity throughout the pandemic, most notably BNPL solutions. Almost half of all consumers (47%) surveyed said they’ve used a BNPL solution, up 27% from Marqeta’s 2020 survey, with over one-third of BNPL users saying they started during the pandemic. With credit card users growing tired of credit card interest rates, the results show that the convenience and flexibility of BNPL solutions make them a potential long-term credit solution for Americans:
- 78% of consumers who have used a BNPL solution said they plan to use it more in the future
- 70% of consumers who have used a BNPL solution said they see themselves using BNPL in place of their credit card
- 59% of consumers who have used a BNPL solution said they find it easier to manage multiple plans than their credit card statements
“Our new survey shows that credit cards are providing consumers with the financial support they’ve needed throughout the pandemic, with American consumers far more engaged with credit card rewards programs than the
Marqeta’s survey also provides intel into what consumers are looking for next from their credit card and BNPL providers. Almost 3-out-of-4 consumers (73%) said they think there should be more solutions available to help them build their credit and expressed their interest in either secured credit-cards or being able to use BNPL services to build credit. With 63% of BNPL users saying they plan on using these options to replace their credit cards. When it comes to credit card rewards, outside of cash back and travel points, 64% of consumers said they are interested in non-traditional options, including cryptocurrencies, lottery rewards or stock options.
“The pandemic has changed the way consumers are thinking about credit and what they want from their providers,” said Mowry. “It shows how the credit market is changing and that financial services should take notice of the new opportunities for innovation in credit offerings.”
Download the full report here: https://www.marqeta.com/resources/resource/2021-state-of-credit
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