Store Credit Cards

Goals

Detail changes in store credit card sales and activity since the start of the COVID-19 pandemic. Identify trends, preferably 5-7, in this space that may be relevant in 2021; provide a description of the trend and any related implications for marketing. This information will be used to inform a digital marketing strategy for a store credit card in 2021.

Early Findings

  • Since the start of the COVID-19 pandemic, overall credit card usage has only increased by 3.4% compared to prior to the pandemic.
  • Many consumers appear to be applying for fewer credit cards and working to payoff their existing balances in the wake of COVID-19, which they attribute to fewer opportunities to spend money and a potential economic recession.
  • Some credit card companies are reducing the limits and closing cards on accounts that are not using the card or have been delinquent for some time in order to reduce the risk of not making any money from the cardholder.
  • The Equifax U.S. National Consume Credit Trends Report from July 5-July 14, 2020, many private label/store credit cards were issued to consumers with credit scores below 620. The average credit limit of these accounts was $790.
  • Store credit cards that offer a mobile wallet version of the card or in-store lookup capability are more likely to be chosen and used by consumers in the wake of the COVID-19 pandemic.

Proposed next steps:

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