Changes in the Credit Card Landscape: Trends, Tech, and Spending
6 Min Read | Last updated: July 17, 2023
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
The credit card landscape has changed in terms of technology, trends, reward offerings, and how people are using their cards. See what’s happening today.
At-A-Glance
- This year, so far, has seen a mixed bag of trends in response to the shifting economy and new consumer needs and preferences.
- Some credit cards are focusing on niche offerings, allowing cardholders to earn extra or bonus points when shopping with partner retailers.
- Credit card companies continue to focus on security and features to help keep data safe.
What trends are in store for this year? It may be too soon to tell, but so far, it’s shaping up to be something of a mixed bag. There are fears of a recession looming on the near horizon, yet consumer spending has increased as well.
Credit card offerings continue to cater to travelers, but business travel, in some ways, is changing as we know it. Then we have seen a few trends that seemed promising, end up fading out — such as cryptocurrency cards. Of course, security remains at the top of everyone’s minds as well, with card companies continuing to implement more sophisticated ways of helping to keep data safe.
What’s happening next with credit cards and spending in the industry at large? Let’s dive in now and find out.
People May Change Their Spending Habits
Fears of a recession could have some people changing their spending habits, with 57% of respondents to a survey last winter saying that they would decrease their home budget if a recession hit.1 But it’s not all doom and gloom. Personal spending rose 1.8% in January, according to the Department of Commerce, with disposable personal income increasing as well.2
People Are Opting to Use Credit or Debit Cards
People have been increasingly relying on debit and credit cards. Today, 41% of Americans say none of their purchases in a typical week are made with cash, up from 29% in 2018 and 24% in 2015, according to Pew Research Center.3 Cashless transaction volume is expected to more than double worldwide by 2030, according to PwC.4
Security Remains a Top Priority
With reports of new scams and hacking hitting the headlines repeatedly over the last few years, security continues to remain at the top of everyone’s minds. Credit card companies are continually seeking better ways to make their customers’ transactions even more secure.
Most credit card issuers have adopted technology such as two-factor authentication, which requires additional steps in the login process to confirm a user’s identity, and in some cases, biometric authentication (like fingerprint or facial recognition).
Digital wallets have also become an increasingly popular way to make purchases today. Tokenization, used for digital wallets and virtual credit cards, helps protect personal data from potential fraud by substituting a random series of letters and numbers for the actual credit card number.
Leisure Travel Is Increasing, and Business Travel Is Changing
After two years of very little travel, people are anxious to travel now. But many people are traveling for leisure, and not as much for business. Or at least not business as we know it. This may be due to companies cutting budgets for travel, but increasingly, we’re seeing a rise in Blurred Travel5, or “bleisure,” where people travel for both business and leisure.
The credit card industry has taken note, with some providers offering generous rewards and other incentives for leisure travel purchases. Some offer additional discounts or cash back when booking a flight or hotel stay through their affiliated loyalty programs.
Buy Now, Pay Later (BNPL) Is Still Going Strong
The Buy Now, Pay Later (BNPL) trend isn’t exactly new, but it’s not going away any time soon either. People appreciate the convenience of being able to purchase now, with a plan to pay it back at their leisure. In fact, according to Insider Intelligence, “over one-third of [U.S.] consumers have used a BNPL service.”6
That’s not too surprising, considering that BNPL gives many people the flexibility to afford a purchase they couldn’t cover on the spot. Depending on the BNPL offering in question, a purchaser may be able to spread out their payments over a period of several weeks or months. Buy Now Pay Later options tied to a borrower’s credit card may come with the added benefit of purchase protection plus, in some cases, even the chance to earn rewards.
More Niche Lifestyle-Oriented Offerings
Credit card reward programs are usually associated with broad spending categories like supermarkets. However, some cards now offer the ability to earn extra points when shopping at certain retailers. People can opt for a credit card that matches their lifestyle and purchasing habits to get additional perks and benefits when spending in those categories. These partnerships allow people to opt for a credit card that more closely aligns with their lifestyle and purchasing habits.
Crypto Rewards May Still Have a Ways to Go
Not too long ago, many people thought that crypto rewards credit cards had the potential to outshine traditional reward cards. But after cryptocurrencies lost over $2 trillion in 20227, many people are holding off on making the switch from their miles and cashback cards to the newer crypto-earning ones.
The crypto market slump of 2022 has dampened enthusiasm for this new trend, and it isn’t a big part of the broader conversation. However, this doesn’t mean that crypto rewards have been forgotten altogether. Investors who are knowledgeable about cryptocurrencies are still looking at these card options. And should cryptocurrencies rebound, we could see even more of these opportunities on the horizon.
The Takeaway
The credit card industry is constantly changing, and people’s spending habits may be too. While it may be too soon to tell what events will end up shaping 2023, one thing is certain, credit card companies are keeping up with the changing times and looking for ways to continue to put their customers first.
1 “How Recession News has Impacted Consumer Spending [Data],” Hubspot
2 “Personal Income and Outlays, January 2023,” Bureau of Economic Analysis
3 “More Americans are joining the ‘cashless’ economy,” Pew Research Center
4 “Payments 2025 and Beyond,” PwC
5 “Blurred Travel: Redefining classic travel categories,” TNMT
6 “The Buy Now, Pay Later Report,” Insider Intelligence
Karen Lynch is a journalist who has covered global business, technology, finance, and related public policy issues for more than 30 years.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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