Analysts Estimate Global Circulation Of Credit Cards to Hit 2.7 Billion By The Year 2015

There are many exciting things on the horizon for the consumer payment industry, including mobile payments, contactless payments and multifunction cards, to name a few. As lenders look to expand business by offering cards to consumers in emerging nations, credit card usage is set to increase worldwide.

Since 2008, the American financial crisis has wreaked havoc upon the country’s credit card industry. Overall, there was a huge reduction in consumer spending throughout the Great Recession yet lenders were still confronted with ever-growing amounts of bed debts. Many borrowers found themselves unable to meet even their minimum monthly payments as a result of job loss or underemployment and this resulted in credit card issuers having to take substantial losses. Therefore, over the past couple of years, lenders have be operating with stricter underwriting standards and only the most creditworthy consumers were finding themselves approved to carry a new credit card.

However, with the current economic climate in the United States showing gradual improvements as a recovery seems to be underway, lenders and borrowers alike are displaying more optimism. Consumers seem more willing to use credit cards to make purchases, and the end of 2011 saw the number of retail consumer credit cards transactions grow although overall spending remained low. Issuers have been looking to expand their customer base by offering great deals for products such as balance transfer credit cards.

There has been a wealth of innovation within the payment product industry as of late. As competition amongst lenders to attract new customers intensifies, technological advancements which will shape the future of the entire industry are playing a large role. Some of the new offerings include mobile payments, multifunction cards and contactless payments.

Additionally, accelerated growth in the credit card industries of several emerging nations is forecast for the near future. This growth will be driven by the rise in middle class populations and their median household incomes. Because the current number of cardholders in emerging nations is low, credit card issuers have ample opportunity to market their product.

In the U.S., many lenders are still struggling to come to terms with the CARD Act law that was affected in 2009. This Act was implemented by the government in attempt to protect consumers against unfair business practices of credit card companies. The resulting fees caps and forced transparency has really changed the entire landscape of the lending industry, making lines of credit more difficult to obtain for consumers with low credit scores.