You'd think that the rise of mobile and digital-based financial payments would cut into the number of credit cards used by American consumers.
But if you thought that, you'd be wrong - at least right now.
According to the personal finance website Finder.com, the number of credit cards in use in the U.S. will reach "record highs" by 2018, with 500 million cards "expected to be in circulation."
That would represent the high point for nationwide credit card use, which had previously peaked in 2008, just before the Great Recession blindsided the U.S. economy (with 496 million cards in use in the second quarter of 2008.) At one point following the economic meltdown, active credit cards fell by 118.2 million, during the third quarter of 2010, Finder.com reports.
"Credit card numbers are rising, and we're anticipating that numbers will be at the highest levels we've ever seen, with 495.8 million individual cards in people's pockets by mid-2018," notes Michelle Hutchison, money expert at Finder.com.
Noting that the number of cards in decline since 2008 was a sign of recessionary fluctuations, Hutchison isn't exactly a big fan of too many credit cards flooding the U.S. economy.
"This is a worrying number of cards in circulation, because it has the potential to create too much bad debt that consumers can't get out of," she says. "Credit cards have some of the worst interest rates of all credit options, with rates as high as 24.99%. If you're not paying off your balance each month you could be wasting hundreds of dollars."
With rates that high, and new financial/technology tools like wearable products growing in popularity with 20- and 30-something consumers, there are plenty of financial analysts who say mobile can, and will, overtake credit cards in usage activity.
"Yes, mobile will win, especially as mobile payment systems like Apple Pay, Android Pay, and Samsung Pay make their way into more wearable devices," says John Ganotis, founder of Credit Card Insider. "For example, it's easier to pay with Apple Pay on an Apple Watch than an iPhone. On an iPhone, the extra step of Touch ID or passcode verification is required for each transaction. Also, since the wearable is attached to the user, it's faster than digging in a pocket or purse for a smartphone with the added risk of dropping it."
Ganotis say credit cards remain popular, as habit and convenience seem to play a role, but there also seems to be an education and marketing gap. "People are already used to reaching for a credit card at the checkout line," he says. "Many point of sale terminals already support mobile payments, but don't have clear indicators of what services are supported. I suspect that many smartphone users don't even know mobile payments are supported by their devices, or haven't set up that feature, so they reach for the familiar old-fashioned piece of plastic."
Just don't expect credit cards to go away overnight, others say, even as mobile technology starts to flex its muscles with younger financial consumers.
"Although it might seem like there is overlap within the two, one will never eclipse the other in the short term," predicts Giacomo Balli, a mobile technology consultant based in San Francisco, Ca. "Although both provide striving to deliver convenience, mobile payments aren't still as widely accepted as credit cards which make it a very long term battle."
Instead, credit cards will continue to "live" for a long time, especially considering how they can be easily passed on to others (Balli says he recently used his mother's credit card to buy an airline flight) and availability of credit. "Not to mention, credit card companies have very strong security and protections for customers," he adds.
Generational demographics play a role in the credit cards versus mobile payment technologies debate, as well.
"Mobile will catch plastic, I'm just waiting on baby boomers to throw away their credit cards," says Gino Pascucci, business development specialist at Premier Trust, in Las Vegas. "The reason plastic is still so popular is because it is the baby boomers favorite way to pay. But the millennial generation is much more comfortable with mobile/digital payments."
A Millennial himself, Pascucci says he grew up in the world of the internet. "Online bill pay isn't new and exciting for us, it's the norm," he says. "Can a Millennial write you a check? Absolutely not, but he or she can Venmo you the money."
Those words may send chills up the spine of credit card company executives - maybe not today, but soon enough, as Millennials step up and supplant Generation X and Baby Boomers in the consumer economy.