Marqeta research shows consumers struggle with credit card payments

Following inflation and the rising cost-of-living, the ‘State of Credit Report 2022’ (fielded by Propeller Research on behalf of Marqeta) shows 57% of the 4000 surveyed consumers (2,000 from the United States, 1,000 from Australia, and 1,000 from the United Kingdom) rely on credit to cope, with 37% reporting that they are struggling to make minimum monthly credit card payments. 

The age-group that is most reliant on credit is Gen Z, 68% of consumers aged 18-25 having reported that they rely on credit card usage to get by. 

Research findings

The shift in the cost-of-living that followed the pandemic has led to consumers becoming more financially aware, 64% of the people surveyed stating that over the past year they have been more conscious of budgeting and saving.

The concerns around inflation and cost-of-living are affecting consumers’ spending decision, with 73% of those surveyed planning on reducing their spending, and 54% stating that they have been delaying major purchasing on credit. Despite that, consumers still rely on credit, the research showing that the usage is driven by the benefits credit cards offer, amongst which the following were mentioned the most by the surveyed population: refund protection on purchases (42%), fraud protection (39%), and the ability to purchase without needing immediate funds (37%).

Looking into BNPL to weather the recession

Marqeta representatives have stated in their press release that banks should address these financial concerns that are expected to worsen, and start offering credit options that show more flexibility, smart budgeting tools, as well as insight into spendings to help consumers navigate rising prices.

The research also provides insights into how consumers’ interest has shifted towards more flexible payment options, many of which have resorted to BNPL (Buy Now, Pay Later). Around 56% of the surveyed consumers have increased their BNPL usage over the past year, with Gen Z the figure being increased to 63%. BNPL adoption amongst the surveyed consumers is rooted in several reasons, with some of the consumers’ benefits mentioned being budgeting help (42%), zero interest charge rate (42%), convenience (37%), and payment flexibility (35%).