Cardholders' credit limits are shrinking during the pandemic - Business Insider

By lowering credit limits and closing cards, issuers can potentially prevent cardholders from making purchases they won't be able to cover later on, improving issuers' performances during the pandemic.

But consumers may need to use credit cards regularly during the pandemic, so restricting their spending could frustrate cardholders. Consumers now have limited access to physical stores, promoting e-commerce, which requires digital payment methods like credit cards. And as consumers face unemployment, credit cards may be particularly appealing since they offer payment flexibility.

It's possible that consumers who find their limits slashed and cards closed will turn to alternative payment options, especially younger consumers who are still forming payment habits, potentially harming issuers' future volume. These consumers may be forced to rely on other payment options, like buy now, pay later solutions, during the pandemic if they need some form of credit but can't rely on a credit card.

As a result, these consumers may continue to use such options after the crisis subsides, which could have a notable negative effect on issuers' performance in the future since younger consumers, who are just spending power, may not be as interested in using credit cards regularly after their limits were adjusted during the pandemic.Business Insider Intelligence analyzes the payments and commerce industry and provides in-depth analyst reports, proprietary forecasts, customizable charts, and more.

Canada Canada Latest News, Canada Canada Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

NASA: SpaceX's mission to fly 2 astronauts 'essential' during pandemic - Business InsiderWhy NASA believes the first SpaceX rocket mission carrying humans into orbit is 'critical' and must move forward despite the growing coronavirus pandemic.
Source: BusinessInsider - 🏆 729. / 51 Read more »

3 ways to improve the virtual interview process if you're hiring during the pandemic - Business InsiderHiring someone without meeting them in person may sound scary, but with a little extra effort it doesn't have to be. Inc Tada!
Source: BusinessInsider - 🏆 729. / 51 Read more »

Barbara Corcoran on real estate investing during coronavirus pandemic - Business Insider'When things are uncertain, it's always the best time to buy,' she said, but you have to know how to spot a good deal and 'buy within the bottom.'
Source: BusinessInsider - 🏆 729. / 51 Read more »

Here's how the 1% are getting their booze during the pandemic - Business InsiderHere's how the 1% are getting their booze during the pandemic, from wine concierge services to online premium liquor retailers that sell $10,000 bottles of whiskey To anyone who's tired even though you just woke up, who's scared to make the wrong choices or to anyone who hasn't been themselves lately, there is so much more to you than this. Allow yourself to feel this for a while and I hope you'll learn to get yourself back. Keep going.
Source: BusinessInsider - 🏆 729. / 51 Read more »

Everything we know about unemployment benefits during the coronavirus pandemic - Business InsiderAs long as you are eligible to receive benefits, you can get an additional $600 a week on top of your regular benefits until July 31 To all you doubters!
Source: BusinessInsider - 🏆 729. / 51 Read more »