The evolution of payment processing technologies coupled with ever-changing consumer credit
preferences has led to several advantages for merchants, creditors and more. Because the landscape has branched out in so many different directions, the playing field options like credit cards, debit cards, prepaid cards and mobile payments have been largely leveled. USA Today recently reported that these options have been largely wielded by college students and their parents, while it attributes much of this revolution to the legislative changes of the last few years, as well as simply more preferable options arising and gaining credibility. For one, the news provider explains that the Credit Card Act substantially hindered teens' ability to obtain credit cards. Now, this demographic must have a co-signer or substantial savings to obtain the cards, placing the control well out of their reach in many situations. Several parents told USA Today that these changes were necessary, especially to protect their children from potentially devastating decisions to spend money they couldn't repay. What could prove to be a hindrance, however, is the fact that this demographic has been stripped of the ability to build credit through traditional channels. Alternative financial services, though, have grown where the traditional consumer credit industry has fallen back. The news provider explains that prepaid cards have obvious benefits with respect to responsible use. Since they are pre-loaded, teens cannot spend more than they can pay back. Additionally, secured credit cards provide another level of advantage as they can help build the credit score of a young consumer, or potentially that of a previously underbanked individual. Like prepaid cards, the risk of going over the limit without ability to pay the balance is negated, as they are pre-loaded with funds. The Federal Reserve has reported substantial decreases in consumer delinquency rates and outstanding credit card debt. Studies have not been carried out to prove a correlation between the improved credit ratings of average U.S. consumers and the advent of these safer alternative credit
channels, though they could simply be two signs of more financial responsibility. This marks an excellent time for debt recovery services to reconcile outstanding balances with consumers, as other reports earlier in the year showed more U.S. citizens are paying off their debts before purchasing more goods.