With the variety of digital and mobile payment methods increasing, you might expect that credit card applications and new accounts would drop or at least remain steady. However, that is not the case. Instead, credit card applications have increased. Many expect that the number of cards being used by consumers in the U.S. will hit 500 million by 2018, which is a new record, surpassing the previous peak in 2008 when 496 million cards were issued. Following the 2008 recession, card usage dropped by more than 118 million.
Card issuers are placing stricter limits on those with poor credit, and hackers are finding new ways to steal information from credit cards despite new chip technology, so it would make sense for younger consumers to use alternative payment forms. Smartphone apps, wearables, and other options have become more user-friendly and secure in recent years, with Android Pay and Apple Pay leading the pack. When paired with an Apple Watch, for example, payment takes only a few seconds.
When it comes to shopping, however, credit cards still reign supreme. Here are a few of the reasons cards are still popular.
- Not all retailers are set up to accept mobile and digital payments.
- These alternative payment methods are not on credit — the consumer must have the money in an account somewhere.
- The older generation may not be willing to adapt to new payment methods.
- Credit cards can be shared with others as needed.
If you want more credit, check out MoneyTips' list of credit card offers.