A majority of U.S. consumers in all age groups—76%—would like to decrease their use of credit cards as they seek to avoid debt, are wary of their ability to pay off their balances each month, and have concerns about making the minimum payments, according to a survey from GoCardless Ltd., a London-based global fintech for account-to-account payments.
These figure are even higher for younger consumers with 84% in both the 18-25 and 25-40 age groups wanting to leave their credit cards in their wallets at the point of sale. Even 63% of those 57 years old or more would like to use their credit cards less. No data was provided for those between 40 and 57.
What do they want to use instead? Debit cards and no-interest installment payments found a lot of favor. In the 18-25 age group, 89% would rather use a debit card as would 87% in the 25-40 group. That dips to 54% for those 57 or older. Regardless of age group, 78% would choose a debit card instead of a credit card.
No-interest installment payment, which is becoming more widespread online and in-store, also is viewed by many, particularly by younger consumers, as a credit card alternative, with 87% in both the 18-25 and 25-40 group preferring it over credit cards. That dips significantly—to 43%—among consumers 57 years old or more. Overall, 70% of consumers would choose buy now, pay later services. GoCardless surveyed more than 1,000 adults June 25 through July 1.
The Covid-19 pandemic was a major factor behind these results, according to GoCardless. “The pandemic put people in tough positions financially, and that likely accelerated the move away from credit cards. But this is part of a larger trend, particularly among young Americans,” Hiroki Takeuchi, co-founder and chief executive of GoCardless, said in a statement. “Alternative payment methods such as buy now, pay later are booming, and Americans are also discovering the benefits of account-to-account payments such as ACH debit, which have been popular in other parts of the world for years.” ACH is a reference to the automated clearing house payment system.
And, given the number of younger consumers wanting options other than credit cards, Takeuchi suggests a “seismic shift” in credit card use is under way.