Consumer credit presents a challenge for financial institutions, as new research reveals revenue and customer relationships at stake when preferred payment methods become unavailable.
[contact-form-7]The PYMNTS Intelligence report “What Consumers Do When Their Go-to Credit Choice Is Unavailable” examines how consumers manage expenses when their primary credit product is inaccessible. Based on a survey of 2,342 U.S. consumers from Feb. 11-18, the report analyzes behaviors when preferred credit options like cards or buy now, pay later (BNPL) are declined due to merchant non-acceptance or reaching credit limits.
The study finds that when unable to use their first-choice credit, consumers primarily pivot to a different credit product or forgo the purchase. For essential expenses, 37% would use another credit product, while 1 in 3 would skip the purchase. For nonessential expenses, skipping (34%) or delaying (33%) the transaction are most frequent, followed by using another credit product (32%).
These trends highlight persistent financial and credit access constraints across essential and nonessential spending. Beyond these primary findings, deeper insights from the report illuminate specific consumer segments and behaviors for financial services providers:
The report further examines the influence of rewards on consumer backup plans and behavioral differences among young or low-income demographics when credit is unavailable. Understanding these detailed responses is important for banks and FinTechs seeking to optimize product offerings and enhance customer loyalty in the evolving digital economy.
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