According to eMarketer, credit cards will remain the most popular payment method for US consumers through next year, with total credit card transactional value to reach $3.8 trillion in 2025. But with changing rewards and fees, it can be a struggle for consumers to know which cards to use.
Cardless Co-founder & President Michael Spelfogel joins Wealth! to to discuss his company and what consumers need to keep in mind in a changing credit card landscape.
Spelfogel offers advice as to what consumers should keep in mind when choosing the right credit card for them: "You want a credit card that relates to who you are or rewards you in the places you spend. There's a lot of diversity in credit cards today. Robinhood (HOOD) is a good example of that. Building a product that will be popular with Gen Z, Millennials...But ultimately the vision of Cardless and companies that do what we do is to expand access as well as the types of products out there."
For more expert insight and the latest market action, click here to watch this full episode of Wealth!
BRAD SMITH: According to data from eMarketer, credit cards will remain the most popular payment method in the United States through the next year, with total credit card transaction value reaching $3.8 trillion in 2025. But knowing which credit card to use and why, that can be a struggle. Different cards offer different rewards, fees, and so forth. And the landscape is changing. Cardless offers options for businesses looking to make their own credit cards, plus much more here.
And we're joined now by the Co-founder and President, Michael Spelfogel, to discuss more about the space. Michael, great to have you here. What was the opportunity that you identified and where you're seeing the largest shift that gives Cardless an opportunity to really Excel in this market?
MICHAEL SPELFOGEL: Well, first of all, thank you for having me on today. It's a pleasure to be here. You know, we started this company five years ago. And Cardless helps brands build credit cards like you said. So for any CMO out there that has consumer business, they're thinking about loyalty. A credit card and building one should be on top of their list. And we make that easy.
BRAD SMITH: And so all of this considered, there's been a lot of movement over the past couple of months at this juncture, whether that be consolidation in the industry, whether that be some of the different rulings that have been passed down, or new entrants-- and one of those new entrants actually being Robinhood as well. We had the opportunity to speak with Vlad Tenev-- our own Executive Editor, Brian Sozzi, did about why they're entering into this market and what customers should expect. I want to play a quick clip of that and get your thoughts on the other side as well about this newest entrant and what it means for the space.
VLAD TENEV: One of the things that's really special about this card is it's a premium card. So it's a card that, to even get rewards and perks approaching this, you'd have to be a high-net-worth individual at other places. And most don't even offer anything like it, and we wanted to make it available to all gold customers. And gold is as little as $5 a month, right? So it's really intended to be a mass market product.
BRAD SMITH: So when choosing what card is right for an individual, for a person, for me, where should the prioritization be? What's the kind of mental checklist that people should be running through?
MICHAEL SPELFOGEL: Yeah. So first of all, you want a credit card that relates to who you are or rewards you in the places that you spend. There's a lot of diversity in credit cards. Today, Robinhood is a good example of that-- building a product that, I think, will be very popular with Gen Z and millennials. Of course, I think it has some downsides, and I'm happy to speak to that. But ultimately, the vision of Cardless and companies that do what we do is to expand access as well as the types of products out there. So you can get a really bespoke product that is unique to your needs.
So we have credit cards today with TAP Portugal, LATAM Airlines, Simon Property Group, which is one of the largest mall operators in the United States. And our hope is that we can help brands build cards that cater to a specific product need. And for consumers, they can get rewards that actually relate to their life day to day.
BRAD SMITH: During times where consumers may be trying to best figure out what the likelihood of a recession looks like-- we hear that come in the consumer confidence data time and time again. And it's one of the larger swears of sentiment out there and perhaps purchasing decisions and how somebody is purchasing, whether that be with cash or with card. How much do they then also tend to tap into some of those rewards and the redemption of those rewards during those times too?
MICHAEL SPELFOGEL: You know, credit cards are powerful products, and with great power comes great responsibility. If used correctly, credit cards can provide fantastic cashback, points earnings, redemptions that can fund vacations and other expenses that would otherwise be costly out-of-pocket expenses each year. So the thing to get caught up with the credit cards is, what is the interest rate? What are the fees in the product? And can you use it responsibly? Cardless cards, for example, many of them don't have annual fees. Many of them don't have late fees or foreign transaction fees. So we want to help consumers use credit responsibly, which can be a tool that they can wield.
BRAD SMITH: You know, Michael, increasingly, I'm tapping to pay-- I think a lot of people out there as well-- maybe you-- doing the same here. So all of that considered, how far away do you believe we are from a future where we're not even pulling out a piece of plastic from our wallets or from our pockets or purses out here?
MICHAEL SPELFOGEL: It's funny you say that. One of the reasons we picked the name Cardless-- it's a bit provocative. It's because we think the future of credit cards is cardless, and it's sooner than you think. So ultimately, in the United States, I still think this is years away. But if you look at places internationally-- China comes to mind especially-- there's almost no cash in the system and almost all payments are actually contactless. So Apple Pay, Google Pay, mobile wallets, Venmo even-- those are going to be the prevalent forms of payments to come.
