Less than 30% of consumers will apply for a credit card in-store this holiday season, the lowest number in 3 years
New LendingTree Report Finds Consumers Prefer Store Cards Over Buy Now, Pay Loans Later
CHARLOTTE, North Carolina, October 4, 2021 / PRNewswire / – Interest in in-store credit cards plunged in 2021, according to a new report from LendingTree. However, consumers are still slightly more likely to use store cards to shop while on vacation than to buy now, to pay off loans later.
Interest in private card applications is dropping to its lowest level since 2018. Only 29% of consumers say they are likely to apply for a credit card in-store this holiday shopping season, up from 44% in 2020, 32% in 2019 and 24% in 2018.
Debt is also decreasing: only 1 in 3 people with a store card said they currently have debt associated with the card. This is a sharp drop from 49% in 2020.
42% of consumers have closed a credit card in store. An additional 13% saw a store card closed by the issuer. The main reasons for the voluntary closures were stopping in-store shopping (46%) and high interest rates (35%).
Average store credit card interest rates remain high, although largely unchanged. The average APR on a new retail credit card offer was 24.27%, up slightly from 24.24% in 2020.
Consumers still prefer store cards instead of buying now, paying later, but it’s close. 29% of consumers would be more likely to pay with a store card this holiday season, while 21% would turn to buy now, pay later financing.
More retailers offer in-store credit cards than buy now, pay loans later, although many offer both. 67 of 126 retailer websites we looked at offered an in-store credit card, while 53 offered a BNPL loan. However, 40 retailers have made both options available.
Buy now, pay later, options appear in unexpected places. Pay in installments at department stores and big box retailers, of course, but pay at Dollar Tree or Panera Bread? Yes, there too it is possible.
“Credit card storage and ‘buy now, pay later’ loans can both be useful tools if used wisely,” LendingTree chief credit analyst said, Matt Schulz. “They can provide much needed short-term flexibility for families who might need a little help stretching their budgets. However, like many financial tools, they’re also dangerous when used recklessly. or reckless. Take the time to research and understand what you’re getting into. “
To view the full report, visit: https://www.lendingtree.com/credit-cards/study/store-card-survey-holidays/.
LendingTree commissioned Qualtrics to conduct an online survey of 2,050 U.S. consumers from Sep 14 to Sep 21, 2021. The survey was administered using a non-probability sample, and quotas were used to ensure that the sample frame represented the overall population. All responses were reviewed by researchers for quality control.
LendingTree (NASDAQ: TREE) is the nation’s leading online marketplace that gives consumers the choices they need to be confident in their financial decisions. LendingTree allows consumers to purchase financial services the same way they would buy airline tickets or hotel stays, by comparing multiple offers from a nationwide network of over 500 partners in a single search, and can choose the option that best suits their financial needs. Services include mortgages, mortgage refinances, auto loans, personal loans, business loans, student loans, insurance, credit cards and more. Through the LendingTree platform, consumers receive free credit scores, credit monitoring, and recommendations to improve their credit health. LendingTree proactively compares consumer credit accounts to offerings in our network and notifies consumers when there is an opportunity to save money. In short, the goal of LendingTree is to help simplify financial decisions for important moments in life through choice, education and support. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information, visit www.lendingtree.com, call 800-555-TREE, like our Facebook page and / or follow us on Twitter @LendingTree
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