Checking out of a swanky hotel last weekend, I handed over my credit card so that the steep bill could be forgotten for a month (or three). But after several incorrect attempts, the Pin was locked. I was also hazy about the Pin on a second card, so both cards ended up being rejected.
It’s a scene that has been repeated across the country, as new rules that came into force last month demand that consumers with “chip and Pin” cards use their four-digit personal Pin to pay for face-to-face transactions.
This hotel was perfectly within its rights to refuse to allow customers to sign for the bill in the old-fashioned way. But it was a lousy conclusion to the weekend and made me determine to jettison all the plastic and use just one credit card with a memorable Pin.
If, as some experts predict, other consumers have had similar problems remembering multiple Pins and switch to a single credit card, this will have a huge impact on the credit card market.
At the moment, the average consumer carries four pieces of plastic (an unwieldy 2.3 credit cards and 1.6 debit cards). The good news in this should be that card issuers will have to compete more aggressively for our business.
Not surprisingly, big credit card issuers refuse to comment on this yet, saying it’s too early to estimate the impact of compulsory “chip and Pin”.
But Mark Bowerman at the payments trade body Apacs says: “It is looking like the number of credit cards in issue is decreasing. It has flattened off, partly because of debt issues – people don’t want to take on more debt.”
Richard Thompson, partner at PricewaterhouseCoopers, researches trends in the credit card industry. He says: “We do think chip and Pin will reduce the number of cards used.
“The key for issuers is to be ‘front of wallet’ – there will be a focus on reward schemes matched to lifestyles and what people value.”
Thompson believes the future of credit cards lies in this “lifestyling” – issuers will hope to become the “winning” card in the wallet because their brand and offers appeal to customers’ wider lives and aspirations.
This might include an expansion of useful loyalty schemes (airline offers or cashback deals) as well as altruistic schemes – such as Amex’s new “Red” card which donates 1 per cent of customers’ spending to fund programmes in Africa helping women and children affected by HIV/Aids.
For those who don’t want (or can’t afford) to ditch excess cards, the obvious solution to the problem of multiple Pins is to go to a cash machine and switch all the cards to a single Pin.
The catch is, of course, that you’ll need to remember the original Pin, or get a reminder from the issuer, in order to change it.
A single Pin for all cards is not recommended practice from a security point of view, but Apacs takes a pragmatic view.
Mark Bowerman explains: “What we say is that if you are struggling to remember numbers, rather than writing them down, change them to the same number. It’s down to each person as to how many different Pins they can remember.”
Research credit card deals at: www.moneysupermarket.com, www.moneysavingexpert.com.
