LAS VEGAS--(BUSINESS WIRE)--Traditional approaches to credit card loyalty have shifted as more people use digital payments, and financial services companies need to reinvent their approach to reflect the current reality, according to new research out today from Marqeta (NASDAQ: MQ), the global modern card issuing platform that enables embedded finance solutions for the world’s innovators. The fourth annual State of Credit Report, released today at Money2020 in Las Vegas surveyed 3,000 people, including 2,000 in the United States, about their use of credit cards, Buy Now Pay Later products and preferences when seeking out new cards. The company’s research found that among people surveyed, credit card loyalty is close to nonexistent, economic uncertainty is leading to more people struggling to pay their credit card bills, and that people have high expectations for what a credit card can provide, but they’re not getting their needs met.

Even happy cardholders are on the lookout for better options

Nearly three quarters (72%) of consumers who said they were satisfied with their credit card still said they plan to apply for a new card in the next year, and almost half (44%) of 18-43 year olds surveyed in the US plan to apply for a credit card in the next 12 months. Even people without plans to apply for a card could be swayed by the right offer. Eighty percent of US 18-43 year olds who had no plans on applying for a card reported that the right feature or reward could get them to apply for a new card, including cash back of $100 or more (51%), 0% interest rate the first year (41%), or a major points sign-up bonus (32%).

“As even the best brands know, customer loyalty is fragile. Even among highly satisfied customers, people are always hunting for the next best thing, and the traditional methods of building loyalty haven’t caught up with the way people are using their cards today,” said Todd Pollak, Chief Revenue Officer, Marqeta. “Brands that don’t evolve to offer highly personalized, flexible card experiences that consumers have come to expect will be left behind.”

Expectations are high when it comes to credit cards, but needs are not being met

Nearly one-third (32%) of US consumers surveyed said that they have stopped using a credit card in the past 12 months. Of US consumers who stopped using a credit card in the last year, one-quarter (25%) said they got a new card that better fits their needs, over one-third (36%) said the interest rate was too high, and 24% said they needed a higher credit limit. When asked what would lead them to use a credit card more frequently, US consumers cited better rewards (44%), lower interest rates (37%), and low or no annual fee (29%) as top reasons.

People surveyed want more personalization, more flexible options and lower interest rates from their credit cards. They’re just not getting what they’re looking for. Nearly one-third (31%) of US consumers surveyed reported personalized rewards and faster access to rewards (35%), as “needs to have” for credit card perks. Given the economic environment, interest rates (44%) topped rewards (41%) as the top feature consumers surveyed are looking for when evaluating credit cards, with 39% of people surveyed looking for a higher credit limit, up from 26% in 2023. In addition:

• Forty-two percent of US consumers surveyed would be interested in a payment card that can switch between debit, credit and BNPL features and capabilities, increasing to 59% of consumers 25-44 years old, and 67% of consumers with plans to apply for a new credit card.
• Fifty-four percent of 18-34 year old US consumers surveyed consider 24/7 dedicated concierge services as a standard card feature, and 38% consider exclusive events a standard card feature as well.

People rely on credit, but are struggling to keep up

While credit is critical to driving people’s livelihoods and spending power, Marqeta’s new report shows that American consumers are struggling. According to the Federal Reserve Bank of New York, credit card debt was at a record high of $1.14 trillion as of the second quarter of 2024, and the average credit card interest rate was 21.76% as of October 2024, up five percentage points from before the pandemic. Marqeta’s research found that 19% of US consumers surveyed reported missing a credit card payment in the past 12 months, with 57% of those missing a card payment for the first time ever. In addition:

• Forty-one percent of 18-44 year olds surveyed in the US reported their credit card debt is higher than it was 12 months ago.
• Thirty-nine percent of US consumers surveyed delayed making a major purchase on credit because of high interest rates.
• Buy Now, Pay Later (BNPL) services have helped consumers unlock purchasing power during these fluctuating economic times, with 62% of BNPL users surveyed reporting that BNPL has helped them make ends meet in the past year, up from 46% in 2022.

To download the full report, please click here.

About Marqeta (NASDAQ: MQ)

Marqeta makes it possible for companies to build and embed financial services into their branded experience—and unlock new ways to grow their business and delight users. The Marqeta platform puts businesses in control of building financial solutions, enabling them to turn real-time data into personalized, optimized solutions for everything from consumer loyalty to capital efficiency. With compliance and security built-in, Marqeta’s platform has been proven at scale, processing more than $200 billion in annual payments volume in 2023. Marqeta is certified to operate in more than 40 countries worldwide and counting. Visit www.marqeta.com to learn more.

About The 2024 State of Credit Report

Marqeta’s 2024 State of Credit survey was fielded by Propeller Research in August 2024 on behalf of Marqeta, surveying 3,021 consumers ages 18 and up (2,020 in the US, 1,001 in the UK).

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements expressed or implied in this press release include, but are not limited to, quotations and statements relating to changing consumer preferences; increasing consumer adoption of certain digital payment methods, products, and solutions; which payment, banking, and financial services products and solutions may succeed; technological and market trends; Marqeta’s business; Marqeta’s products and services; and statements made by Marqeta’s senior leadership. Actual results may differ materially from the expectations contained in these statements due to risks and uncertainties, including, but not limited to, the following: any factors creating issues with changes in domestic and international business, market, financial, political and legal conditions; and those risks and uncertainties included in the “Risk Factors” disclosed in Marqeta's Annual Report on Form 10-K, as may be updated from time to time in Marqeta’s periodic filings with the SEC, available at www.sec.gov and Marqeta’s website at http://investors.marqeta.com. The forward-looking statements in this press release are based on information available to Marqeta as of the date hereof. Marqeta disclaims any obligation to update any forward-looking statements, except as required by law.