Why a credit card program still matters

The success of buy now, pay later (BNPL) has proven that consumers like having choices. And choice is why you should consider a dual product offering strategy that includes both BNPL and a branded credit card. Meeting consumers where they are is key to increasing customer acquisition and retaining your existing customers. In this four-part series, we walk you through the key factors you need to contemplate as you decide the best way to design and launch a credit card of your own. We begin with this deep dive into why a credit card program still matters.

As noted by the Consumer Financial Protection Bureau (CFPB), credit cards remain central to the financial lives of most U.S. consumers. According to data from Statista, credit card penetration has risen steadily from 46% in 2010 to an estimated 61% in 2022. Indeed, the CFPB reports that more than 175 million Americans have at least one credit card, and the New York Fed reports that the U.S accounted for over 500 million credit cards. Penetration is projected to reach 66% by 2025.

Even when times get tough, U.S. consumers rely on their credit cards. As revealed by Marqeta’s 2021 State of Credit Report, credit cards proved to be a reliable source of financial stability during the pandemic, helping to make ends meet. The fact that credit scores are up, late payment and default rates are at historic lows and average credit card debt fell significantly during the pandemic suggests Americans seized the opportunity to reset their finances.

Customer acquisition, engagement

A key reason many brands and fintechs have launched branded credit card programs for consumers is they made their respective brands a bigger part of the lives of their users. This is especially true for Gen Z consumers who are exploring credit offerings for the first time. If you think back to the first credit card you had, you may remember the feeling of being trusted and the responsibility that came with it. 

Turning your customers into cardholders builds a sense of loyalty and affinity that can elevate your customer relationships to another level.

A branded credit card program also makes it possible to cultivate deeper relationships through additional touchpoints. Pairing account updates – and even monthly bills – with tailored marketing messages can make customers feel special, provide opportunity for cross-sell, and add perceived value. 

Moreover, you can design a credit card tailored to the unique preferences of your customers with customized offers, card controls, and rewards. The fact that many branded credit card programs provide deep insights about cardholder buying behavior in real-time can help to inform the timing and content of your messages, increase engagement with your other products, and guide development of new products and services. 

A tool in the toolbox

More than ever, consumer payment preferences depend on the context of the transaction. Many use cash or tap their mobile wallets for very small transactions, peer-to-peer apps when paying friends, credit or debit for everyday purchases and bill pay, and credit or BNPL for larger purchases that they want to pay-off over time. 

A branded credit card program does not exclude or compete with other payment strategies your company may be offering or considering. Instead, it can give you a diverse offering of payment options that enhance your customers’ buying experiences by catering to their wants and needs. At the moment of decision, providing the payment type they prefer can entice them into buying when they otherwise might not.

Need for speed

Some brands and fintechs worry they lack the time and expertise needed to get a credit card program off the ground. They are strategizing about how to gain a competitive advantage, but have also found that waiting until next year is out of the question. Thankfully, those concerns are outdated. You can now launch a card program quickly with an end-to-end platform that makes payments expertise within your organization a “nice-to-have” rather than a “must-have.”

By leveraging Marqeta’s modern card issuing platform, open APIs, and the services of our integrated partners, your brand can launch a completely embedded card program in months.

Through APIs and dashboards, you can do it all: 

  • Configure APRs, credit lines, payments, and fees

  • Personalize the look and feel of the cards

  • Open accounts, and provision cards – whether virtual, plastic or stored in a mobile wallet

This API-first approach makes it possible for any company to launch highly customized credit card products that reflect their brand. The ability to adjust on the fly means you can freely iterate and experiment, which bakes in innovation. 

Get the eBook

In our next article we will dive into how you can build and design rewards structures that will set you apart from your competition. Learn more about building a modern credit card program in our eBook, or talk to a credit expert on ways a credit card program can help you build loyalty with your customers.