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GoCardless Survey: Three-quarters of Americans Plan to Decrease Their Use of Credit Cards as Debt Falls out of Favor

Linda Yang

By Linda YangJul 20211 min read

Post-pandemic, many U.S. consumers are retiring their credit cards — with young Americans making this a permanent trend

SAN FRANCISCO, 21 July 2021 -- After decades of dominance in the U.S., credit cards may be on their way out as alternative payments come to the fore. According to a survey from GoCardless, a global fintech for account-to-account payments, 76% of Americans would like to decrease their use of credit cards. A similar proportion (77%) revealed they are more likely to use their debit card than a credit card for purchases.

The figures are higher among the next generations of shoppers indicating a permanent shift in consumer preferences as Gen Z and Millennials increase their purchasing power in the coming years. In addition to harboring a distinct dislike for credit cards, both cohorts revealed a striking preference for new forms of payment, including Buy Now Pay Later (BNPL).

Age: 18-24 25-40 57+ All
Would like to decrease use of credit cards: 84% 84% 63% 76%
Would rather use debit than credit cards: 89% 87% 54% 78%
Would rather use no-interest installment payment providers (e.g., Klarna or Affirm) over credit cards: 87% 87% 43% 70%

Pandemic dampened American enthusiasm for credit cards

A majority of Americans (63%) say they are less likely to use credit cards for purchases now than before the pandemic. This number is significantly higher among Gen Z and Millennials, rising to 76% among 18-24 year olds and 74% among 25-40 year olds. 

Of those using their credit cards less due to the pandemic, most are doing so out of financial concerns. Reasons include:

  • Wary of getting into debt (46%)

  • Fear of not being able to pay off the balance each month (27%)

  • Concerns about managing the minimum payment (26%)

“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,” said Hiroki Takeuchi, co-founder and CEO of GoCardless. “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. Though they’ve dominated in the U.S. for decades, it’s clear that a seismic shift has started, and credit cards will be obsolete in a generation or two.”

For more information, contact:

Alisha Alvarez for GoCardless Alisha@bospar.com

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