Though only about one-quarter of credit cardholders say they were offered 0% APR on new purchases (24%) and/or reduced APR on new purchases (22%) during the last 3 months of the COVID-19 pandemic, the observed take rates were high.
About half of those offered accepted, and many used their card more as a result—77% who accepted the 0% offer, and 66% who accepted the reduced APR offer, said they used the card more than typical after receiving the offer.
High-traffic, high-density businesses will likely struggle as business start to reopen following COVID-19 closures. Nearly half of cardholder don’t see themselves going to gyms, bars, or sporting events in the near future, and many of those who frequented various businesses prior to COVID-19 say they expect to go to those businesses less once they reopen.
According to Auriemma’s in-depth interviews with consumers, many anticipate a long road ahead before things return to normal, if ever.
Over one-quarter say COVID-19 has made them more likely to enroll in an installment plan and more cardholders are taking advantage of these options, particularly in-store (compared to Q4-19).
Issuers have done a number of things over the course of 2020 to help cardholders through these uncertain times. About two-in-five cardholders say they were offered at least 1 of 5 tested payment accommodation in the past 6 months. And the take rate among those offered is high—most accepted the payment accommodation they were offered.
According to Auriemma’s in-depth interviews with consumers, many have used different merchants, brands, and purchase channels than typical because of COVID-19.
COVID-19 has not only changed how consumers shop, but also where they shop. Nearly two-thirds (64%) of cardholders say they have become more willing to try new ways to shop. And 40% of recent online shoppers have tried shopping with new merchants since the COVID-19 outbreak.
Many cardholders said stores they regularly shop at were out of many items, that they needed to switch from their preferred brand to purchase an item they needed, and that they have visited stores they don’t normally shop at to find what they need.
62% of cardholders are shopping online more than usual due to COVID-19, with some buying cleaning supplies, toiletries, and groceries for the first time via the channel as a result.
And although consumers have historically preferred in-store shopping for groceries (and most still do), a notable 31% say they prefer using digital channels (i.e., websites, mobile apps) to make grocery purchases.
64% of those charged a missed payment fee on their credit card had the fee waived. Few (8%) report missing credit card payments because of COVID-19, but these figures increase dramatically when looking at revolvers (16%) and sub-prime/near prime cardholders (23%).
Sub-prime cardholders are more likely to report high levels of concern about their personal finances, and reasonably so. These individuals are disproportionately impacted by the COVID-19 pandemic—notably higher proportions are missing credit card, bill, or loan payments as a result.