FIs rethink credit card program design as consumers rethink how they use them

The pandemic fundamentally changed how consumers use credit cards and the long-term profits financial institutions generate from those cardholders.

Consumers allocated some of their stimulus payments to pay down their credit card balances, wiping some $83 billion from credit card outstanding in 2020. These consumers also shifted spending from credit to debit.

Spending on credit cards shifted too, from experiences outside of the home — dining out and travel — to products to products enjoyed at home, such as groceries, home furnishings, food delivery and streaming services. This shift in how cardholders use their cards didn’t just impact spending, but the value of rewards programs pegged to travel they no longer did or did as much.

Financial institutions (FIs) unable to align their credit card programs with their cardholders’ spending behaviors and customer service expectations risk losing cardholders and the profits derived from credit card programs to competitors that can.


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