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High inflation and growing interest rates are putting the credit card industry in a precarious position. As 2023 progresses, issuers and networks will rethink their strategies and marketing schemes to protect their bottom lines.

Digital wallet adoption significantly outpaces credit card usage. Consumers strongly prefer digital wallets (58.2%) over credit cards (36.9%) for online purchases, per 蘑菇AV and ESW. Retailers must prioritize digital wallet integration in checkout processes to maximize conversion rates and reduce payment friction.

My number is one in six Gen Z credit card users have maxed out their credit cards. Lauren Ashcraft (06:58):. Wow. Grace Broadbent (06:58):. Which means they've utilized more than 90% of their credit limits, which is well higher than any other generation. Rob Rubin (07:05):. Yeah. Grace Broadbent (07:05):.

Capital One would also become the largest credit card issuer and the sixth largest bank in assets, propelling it past Goldman Sachs, PNC Bank, and Truist Bank. Our take: Given recent reporting, it seems unlikely that the DOJ will sue to block the merger, a major win for Capital One and Discover. The DOJ will instead leave the approval up to the Fed and the OCC.

Dollar store consumers, especially lower-income households, are facing financial difficulties, relying on credit cards to cover necessities. Retailers like Dollar General and Dollar Tree are focusing on pricing and promotions to keep customers shopping, but there has been a decline in discretionary spending from middle- and high-income consumers, who may be turning to mass retailers like Walmart.

Extending credit to fewer consumers across the income spectrum means issuers are using their ad money to target a smaller, wealthier share of consumers who could easily get approved for a card from any issuer. But middle- and lower-income consumers aren鈥檛 eager for new cards. Net consumer demand for credit cards has decreased for most of 2024, per the Fed.

Despite efforts from payment providers, point-of-sale (POS) adoption remains a sticking point: 40.1% of crypto owners who don鈥檛 use it for payments cite lack of acceptance as a top barrier, according to our August 2024 US Cash-Back Credit Cards Emerging Features survey. But that鈥檚 beginning to change as more merchants embrace stablecoins.

Recalibrate products for a cautious consumer with low-risk, value-driven products鈥攕uch as high-yield savings accounts, secured credit cards, and flexible personal loans鈥攖o attract depositors and retain wary borrowers.

Gen Z favors cashback and discounts, driving adoption of credit cards (46% for rewards, 36% for convenience). They want to make their money work harder for them, according to our research, since their top goal is saving. 42% find existing digital banking experiences lacking in user-friendliness, and only 7% trust bank representatives for financial advice.

Methodology: Data is from the February 2025 Earnest Analytics report titled "Tracking Fitness Spending and Wellness Device Trends With Credit Card Transaction Data." Data is based on Earnest's Orion transaction data and online Earnest Dash platform, which includes sales records for individual, anonymous credit, and debit card accounts.

Launched in 2003 as an integrated payment solution for Mercado Libre鈥檚 marketplace, Mercado Pago has evolved into a comprehensive fintech platform offering digital wallets, QR code payments, point-of-sale (POS) machines, credit cards, and more. These financial services have enabled millions of unbanked consumers to participate in Latin America鈥檚 thriving digital economy.

础辫辫濒别鈥檚 credit card, BNPL product, and savings account put it in direct competition with financial services incumbents. With 130.1 million US iOS users loyal to its unsurpassed UX and dominant digital platform, the threat will only grow.

The new product adds to their existing offerings, which include deposits, co-branded credit cards, and business banking products. How we got here: State Farm has over 91 million active insurance policies, per its website. And since its partnership with U.S. Bank began in 2020, over 900,000 State Farm customers have accessed U.S. Bank鈥檚 products.

Offering secured or subscription credit cards can help issuers attract these customers and bolster account openings

But the data suggests a full credit card recovery will likely take longer than expected

But growing credit card borrowing comes with risks for issuers as delinquencies also rise

In October, the Consumer Financial Protection Bureau (CFPB) released its final open banking rule, which requires FIs, credit card issuers, and payment apps like Venmo and Apple Pay to transfer a consumer鈥檚 financial data to other providers upon that person鈥檚 request.

Over the holidays, 54% of Gen Zers used BNPL, outpacing the 50% who used credit cards, per a J.D. Power survey. That鈥檚 well ahead of the general public, where only 32% used BNPL, compared to 61% who used credit cards. Gen Z鈥檚 reliance on BNPL is only growing.