Future for the Credit Card
Debit cards have long competed with credit cards, but they have never pushed credit cards out of the payment space—even during the Great Recession when millennial distrust of credit ran rampant. Knowing debit cards’ biggest failing points is important to understanding why other payment innovations pale when compared to the credit card.
Debit cards rarely give consumers the opportunity to accrue rewards, and they don’t help build a credit score. Debit cards are also at a major disadvantage since credit cards are more secure (and no one agrees more than the author and former fraudster Frank Abagnale). A credit card company will defend you and negotiate on your behalf with the merchant in the event of a fraudulent transaction. Additionally, the funds won’t ever go from your bank account.
The tale changes when a malicious party obtains access to your bank account. If fraud is successfully reimbursed, it may take several months, and while that time the customer is completely cut off from their money.
Debit cards have been present for many years, but a recent development hailed as a competitive payment innovation is the ability to link bank accounts to online activities. You can use your bank to make payments when you pay online. However, where is the consumer advantage? Compared to debit cards, credit cards offer greater protection to users against fraudulent conduct.
Technological Advancements in Credit Cards
Credit cards are changing as a result of the same technology that is propelling fintech innovation. Thanks to this technology, which is built on mobile and digital front ends backed by APIs and SDKs and cloud infrastructure, practically any size business or brand may now offer customized cards.
The same technology that is making plastic cards digital is also revolutionizing rewards programs, taking them beyond basic airline, shop, and cash-back programs. Customers may be able to take advantage of new, helpful perks through new incentive possibilities.
New Opportunities with Credit Cards
As more banks and other financial institutions join the market, they are eager to support co-branded credit cards for smaller companies or groups. Businesses can now provide prizes in cryptocurrency, fractional shares, charitable contributions, payback of student loans, and other areas.
Credit cards are growing into new markets and providing consumers and businesses with a plethora of new opportunities, rather than going extinct. Also, don’t listen to anyone who says otherwise.