Credit card payments on the rise
April 29, 2015

Credit card processing has changed dramatically in a relatively short time. While credit card usage decreased during the recession, it saw an increase in 2014 that is expected to continue. In addition, a Nielson study forecasted cash and check use will drop 40 percent over the next five years, while credit card payments will grow 65 percent.

According to PYMNTS, credit card spending will rise in small businesses. The increase is partially because consumers use debit and credit cards to make smaller purchases.

The recession's impact on credit card spending
Despite the predicted increase in credit card payments, millennials are waiting longer to get their first credit cards. Before the recession, many people signed up for their first credit cards when they were in college. However, the millennial generation faced a drastic financial situation and a tough job market, which steered many of them away from credit cards. In fact, 36 percent of U.S. consumers younger than 30 have never had a credit card, according to Daily Finance.

In 2009, the CARD Act set some restrictions to limit credit card usage among young adults. In the past, people could sign up for preapproved offers, but these regulations require consumers younger than 21 to provide proof of income or have a co-signer. Most college students started using debit cards instead.

As the economy improves, more millennials may make the switch to credit cards, especially ones that offer rewards and increase their security. Despite Generation Y's reluctance toward credit cards immediately following the recession, they haven't used cash or check payments. Debit cards are highly popular with young adults.

What people look for in their credit cards
In the near future, people may rely on a single financial institution for all their needs rather than enrolling for multiple cards. Additionally, people pursue cards that offer rewards. According to PYMNTS, 90 percent of credit cards offer rewards, which has been a major development in the past five years. Previously, fewer cards offered customer benefits.

Consumers, especially young adults, want to stay on the cutting edge of technology and secure their financial information. Mobile payments are becoming more popular, so customers want credit cards that allow them to use this technology. However, mobile payments bring in new questions about security. Retailers will need to take the proper precautions to secure customer data from credit card payments.

Nexus: G-WEBCD2