Consumers are increasingly seeking more personalised benefits from their credit card providers, such as rewards and loyalty points, according to a new survey by card issuing platform Marqeta.
In its fourth annual ‘State of Credit‘ report, Marqeta found that customer loyalty to credit cards is shifting, as the public explore new financial products and services that better meet their individual needs.
The card issuing platform polled 3,000 consumers globally, including 1,000 in the UK, of which 53 per cent confirmed that their credit card helped them to make ends meet in the last year. However, 48 per cent confirmed that none of their credit cards currently accrue rewards, loyalty points or other benefits.
Of people that reported using two or more credit cards, 43 per cent confirmed they would use a credit card more frequently if better rewards were offered.
Embedded finance is also driving more demand in the UK for rewards and personalisation, with more consumers using financial services offered by non-financial providers to access benefits and loyalty points. Thirty per cent of UK respondents confirm they own a credit card affiliated with a brand of store, a 25 per cent increase in just 12 months since Marqeta’s last State of Credit report in 2023.
“Financial services companies need to look at the way the market is going and reinvent their approach to reflect the highly personalised, flexible financial experiences that consumers are now demanding,” explained Marcin Glogowski, SVP, managing director, Europe and UK, CEO at Marqeta.
Expanding purchasing power to everyone
There has also been a noticeable shift in consumer attitudes toward the opportunities provided by emerging financial services, such as buy now, pay later (BNPL). Around 63 per cent of UK BNPL users confirmed that the service helped them make ends meet during the last 12 months, and this rose to 70 per cent amongst 44 to 59-year-olds.
People reported using BNPL due to the fact they helped them budget (44 per cent), offered convenience (43 per cent) and charged zero interest (39 per cent). Marqeta also found that there is increasing levels of consumer appetite for choice and flexibility in new financial services, with 44 per cent of UK respondents stating that they are interested in using a payment card that can switch between debit, credit and BNPL features.
Thirty percent of UK consumers revealed their debt was higher than it was this time last year, and nearly three quarters of people surveyed (74 per cent) reported struggling to meet minimum monthly credit card payments during the last 12 months. Additionally, 13 per cent of respondents reported that they’d missed a credit card payment in the past 12 months – for 66 per cent of those, this was the first time they had ever missed a credit card payment.
“Banks have done a very good job at monetising loans and credit, but by managing risk so effectively, the system has catered to wealthier people who have more assets,” said Glogowski. “Expanding purchasing power to everybody requires significant investment in technology. For example, upgrading solutions to analyse reams of data to determine more about an applicant’s credit request and personal requirements than has previously been possible.”
