A research report has further suggested that growth in CU cards might come more from members bringing higher rate card balances to the CUs than from growth in member card use.
A Javelin Strategy & Research report titled "Payment Card Issuer Strategies 2010: The Rise of the 'Cautious Consumer'" documented how many consumers are choosing payment methods and strategies other than credit cards.
"Javelin's research shows that as the economy recovers, many credit card-wary, cash-hoarding consumers have the means, but simply lack the motivation to spend," said James Van Dyke, president and dounder, Javelin Strategy & Research. "The upside is that consumers can look forward to new offers such as lower fees, increased rewards, and reduced rates as credit card issuers scramble to adjust their strategies and look for new ways to court consumers and reinvigorate spending."
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Javelin's research found that consumer credit card use is at an all-time low as options such as reloadable prepaid cards have become more important for consumers looking to stay in control of their finances.
"This marked shift in spending behavior will continue to drive new trends in payment innovation, particularly in the face of new regulations such as the CARD Act, the Durbin Amendment and modifications to Reg E and as card issuers seek to repair their image by offering incentives that address the new needs of the 'cautious consumer,'" the research firm said.
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