Credit cards have long been the king of consumer payments — but cracks in the foundation are starting to show.

In 2025, the traditional credit card model is facing pressure from multiple angles: new consumer preferences, fintech disruption, and evolving regulatory scrutiny. The big question: is the credit card era on the decline, or just being redefined?

👤 Consumers Are Rethinking Credit

Younger generations — especially Gen Z — are showing a clear shift in mindset. Many are wary of revolving debt and are turning to debit-first solutions, BNPL (Buy Now, Pay Later), or even alternative credit models that offer more control and transparency.

According to a recent survey by TransUnion, over 60% of Gen Z consumers said they would rather use a debit or BNPL product than a traditional credit card. This isn’t just a preference — it’s a generational shift in how people view borrowing and budgeting.

💳 Issuers Are Feeling the Pressure

Even major card issuers are adapting. Apple recently rebranded its credit offering to emphasize budgeting tools and transparency — a subtle but telling signal.

Meanwhile, rewards programs — once a major differentiator — are becoming harder to sustain as interchange fee scrutiny grows and margins shrink. That puts pressure on both traditional banks and neobanks to evolve their offerings.

🏦 BNPL & Fintech Credit Are Gaining Ground

BNPL is no longer just a flashy fintech trend. Players like Affirm, Klarna, and PayPal are embedded at the point of sale — directly intercepting credit card volume. And with Apple Pay Later and others jumping in, the lines between “credit” and “payment” continue to blur.

Some banks are even partnering with BNPL providers or launching installment products of their own to keep pace.

📈 The Bottom Line

Credit cards aren’t going away anytime soon. But the business model behind them — and consumer loyalty to them — is under real pressure.

The winners will be those who:

• Offer transparency and flexibility
• Reimagine rewards for new spending habits
• Seamlessly integrate into digital and mobile-first experiences

🤝 Need to Stay Ahead in Payments?

At IMPACT Payments Recruiting, we stay on top of trends so you can stay ahead of the curve — with talent that’s already thinking about what’s next.

📩 Let’s talk — contactIPR@go-impact.com