The rise of digital shops has led to an increase in the number of people using credit cards for payment. This has given the fintech industry a huge scope of advancement, which prompted the launch of virtual credit cards. However, it is not clear if this innovation will lead to the replacement of traditional credit cards.
Despite the outbreak of the coronavirus pandemic, credit cards are still an essential part of our lives. The rise of virtual and digital credit cards has led to an increase in the number of people using them online. They prefer to use QR scanners or tap on their phones to pay.
Changes Triggering Switch to Digital Cards From Physical Cards
For the last 70 years, credit cards have been gradually converted to digital. Due to the various features and safety measures offered by banks, the number of people using credit cards has increased. During the outbreak, people avoided interacting with each other, which led to the rise of contactless credit cards.
The rise of the e-commerce industry also led to an increase in the number of card transactions. Due to the increasing number of transactions, people preferred to keep their credit card details on their phones.
Benefits of Credit Cards
Aside from being advantageous, credit cards come with various perks and features. One of these is the “Buy Now/Pay Later” feature, which allows people to make large purchases on borrowed credit. This feature allows them to pay for their purchases in small monthly payments.
According to the experts at SoFi, “It is important to shop around and compare APRs when you’re looking for a new credit card.” Each credit card will come with an annual percentage rate (APR) to charge for interest fees. What is a good APR for a credit card? A good interest rate is anything below the national average of 16.44%.
Read more: Retiree Decides to Spend Rest of Life at Holiday Inn, Since It’s cheaper than a retirement home.
Credit Cards Getting Interrupted by Tech
The shift to digital credit cards has been considered an existential threat to the traditional credit card industry. Traditional credit cards used to have long waiting times and menus that included interactive menus and jingles. With the availability of digital credit cards, banks can now provide immediate assistance to their customers. The integration of digital credit cards with AI has also led to the development of new payment tools that can help people manage their purchases.
Do Credit Cards Have a Future?
Unlike the physical credit card, which has a 16-digit number and an expiration date, digital credit cards do not have these features. Instead, they can be used similarly to other forms of payment, such as Google Pay and PayTM. These new cards offer a higher level of security and are more convenient to use. Digital cards make it easier for consumers to safely make purchases online.
Although the evolution of digital credit cards is expected, the use of physical credit cards will continue to grow. With the availability of more secure methods of payment and better rewards, the shift to digital credit cards is expected to happen eventually.