Table of Contents
Scope and Themes
-
- What you need to know
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
-
- Industry snapshot
- General trends
- Rewards are rewarding
- Credit card consumers
- Revolvers and transactors
- Consumers and advertising
- Security concerns
- Contactless cards
- Advertising overview
- On the horizon
Market Drivers
-
- Saturation in the marketplace
-
- Figure 1: Percentage of individuals with at least one credit card, by gender and age, 2006
- Increasing usage is the key
-
- Figure 2: Credit card direct mail response rates, December 2003-August 2006
- Immediate and customized rewards programs
- Rewards and retention
- Strategies in rewards programs: A case study
- Rewards programs and affluent consumers
- “Transactors” vs. “Revolvers”: recognizing differences
- Consumer concerns about security
- Fees and rates are increasing
-
- Figure 3: Consumer payment trends, 2004-06
- Figure 4: Monthly payment rates, November 2005-July 2006
-
- Figure 5: Over-limit fee historial averages, 1994-2005
- Merchants push back
- Consumer protection legislation
- Debit cards pose serious competition
-
- Figure 6: Volume and number of VISA and MasterCard signature debit cards, 2000-05
- Growing usage of credit or debit for smaller purchases
- Debit competing with credit for online purchases
- Challenges from growth in prepaid and gift cards
-
- Figure 7: Five-year tracking of U.S. consumers’ year-round gift card purchases & use, 2001-05
- Contactless cards
- The need for speed
- Credit card companies explore contactless technology
- MasterCard PayPass
- Payment by cell phone
- Promising venues for using contactless payment
- Contactless payments as a way to serve small business
- New transaction categories and incentives
- Income taxes
-
- Figure 8: Intent to pay taxes with a credit card, 2004-06
- Utility bills
- College savings plans
- Marriage, birth and death certificates
- Rent
- Vending machines and parking
- Health savings accounts
- Unemployment
- In-flight transactions
Market Size and Segmentation
-
- Overview
-
- Figure 9: Total U.S. credit card charge dollar volume and transactions, 1999-2005
- Industry consolidation
-
- Figure 10: Bank mergers and acquisitions, 1996-2006
-
- Figure 11: Top credit card issuers, by dollars outstanding, year end 2005
- Figure 12: Top 20 U.S. VISA and MasterCard issuers ranked by dollar volume, mid-year 2006
-
- Figure 13: Top 20 U.S. issuers of VISA and MasterCard ranked by outstandings, mid-year 2006
- Figure 14: Number of VISA, MasterCard and American Express cards in millions, 2006
-
- Figure 15: Brand share of payment—card sales volume, 2003-06
- Figure 16: Transaction volume share for VISA, MasterCard and American Express, 2005
- Small business cards
-
- Figure 17: Total purchasing volume for VISA and MasterCard, by type of card, 2005
- Figure 18: Total commercial consumption expenditures, 2005
- Bill payments
-
- Figure 19: Consumer bill payments on VISA cards, 2000-05
Competitive Landscape
-
- Legislation opens the market for American Express and Discover
- Credit card companies taking new security measures
- Changing strategies to attract and retain consumers
- Store cards
-
- Figure 20: U.S. store credit card market, 2004
- Figure 21: U.S. merchant acquiring transaction volume, by source, 2006
- Chase’s rewards program is “changing” the landscape
- Other variations on rewards programs
- Rewards based on personal hobbies or interests
- Greater flexibility in using rewards
- Affinity cards focusing on niche markets
- Banks issuing cards exclusively for their customers
- Competing for affluent consumers
- Targeting the unbanked
- Marketing to college students and younger consumers
-
- Figure 22: Undergraduate student credit card usage, 1998-2004
- Strategies for marketing to college students
- Marketing to “Generation Plastic”
-
- Figure 23: Share of dollars spent using plastic, by age, August 2006
- Targeting teens
-
- Figure 24: Teenagers and credit card ownership, by age, 2006
- Figure 25: Teenagers who have used a credit card in last 12 months, by type of transaction, by age, 2006
- Federal Government accepting credit cards
- Credit score developments
- Contactless technology
- Contactless debit
Advertising and Promotion
-
- Direct mail
-
- Figure 26: Credit card direct mail response rates, 1998-2006
- Personalization
-
- Figure 27: Personalization in direct mail advertisements, by sector, 2001-06
- Leaders in direct mail
- Rewards program offerings
- Non-rewards card promotions
- Other marketing efforts
- Marketing smarter—predictive marketing
- Chase’s New Freedom Rewards for both VISA and MasterCard
- Discover
- VISA
- MasterCard
- American Express
The Consumer
-
- Credit card ownership
-
- Figure 28: Percentage of individuals with at least one credit card, by gender and age, 2006
-
- Figure 29: Individuals owning any credit card, by age, 2006
-
- Figure 30: Have any credit card, by gender, May 2002-June 2006
-
- Figure 31: Have any credit card, by age, May 2002-June 2006
-
- Figure 32: Type of credit card owned, by brand and by gender, June 2006
-
- Figure 33: Credit card ownership, by brand and by race/ethnicity, 2006
-
- Figure 34: Individuals owning credit cards, by income level, 2006
-
- Figure 35: Credit card ownership, by number of people in the household, 2006
-
- Figure 36: Percentage of individuals aged 18-24 owning credit cards, 2000-05
-
- Figure 37: Percentage of all individuals aged 18+ owning credit cards, 2000-05
- Credit card usage
-
- Figure 38: Individuals using any credit card, by gender, 2006
-
- Figure 39: Number of credit cards used in a typical month, by gender, 2006
-
- Figure 40: Transactions in last 30 days, by gender, 2006
-
- Figure 41: Have used credit card in last 30 days, by gender, June 2006
- Usage by transaction size
-
- Figure 42: Credit card usage, by type of transaction, by gender, October 2006
-
- Figure 43: Credit card usage, by type of transaction, by age, October 2006
-
- Figure 44: Credit card usage, by type of transaction, by income, October 2006
-
- Figure 45: Credit card usage, by type of transaction, by race/ethnicity, October 2006
-
- Figure 46: Transaction categories for which a credit card is used—all respondents, October 2006
-
- Figure 47: Transaction categories for which a credit card is used—males, October 2006
-
- Figure 48: Transaction categories for which a credit card is used—females, October 2006
- Credit vs. debit usage
-
- Figure 49: Preferred payment options consumers used for various types of purchases, 2006
-
- Figure 50: Reasons for using credit or debit card for online purchases, 2006
-
- Figure 51: Usage of credit, debit and cash/check, by gender, October 2006
- Business card ownership and usage
-
- Figure 52: Individuals owning business credit card, 2006
-
- Figure 53: Individuals using MasterCard business card, by gender and race/ethnicity, 2006
-
- Figure 54: Individuals using VISA business card, by gender and race/ethnicity, 2006
-
- Figure 55: Individuals using American Express business card, by gender and race/ethnicity, 2006
- Payment behavior
-
- Figure 56: Credit card payment activity, by gender, October 2006
-
- Figure 57: Credit card payment activity, by age, October 2006
-
- Figure 58: Credit card payment activity, by income, October 2006
-
- Figure 59: Credit card payment activity, by race/ethnicity, October 2006
-
- Figure 60: Credit card payment activity, by employment status, October 2006
- Payment behavior by card type
-
- Figure 61: Payment behavior, by card type, May 2002-June 2006
- Revolvers and transactors
- The truth behind revolving balances
-
- Figure 62: Strategies for paying down credit card debt, 2005
- Characteristics of credit card owners—revolvers vs. transactors
-
- Figure 63: Revolvers and transactors—characteristics of credit card owners, 2001
-
- Figure 64: Revolvers and transactors—planning time horizon, 2001
- Revolvers and transactors—Mintel’s survey
-
- Figure 65: Revolvers and transactors—type of purchases made, October 2006
-
- Figure 66: Transactors—transaction categories for which a credit card is used, October 2006
-
- Figure 67: Revolvers (make more than the minimum payment each month)—transaction categories for which a credit card is used, October 2006
-
- Figure 68: Revolvers (usually make minimum payment each month)—transaction categories for which a credit card is used, October 2006
- Revolvers and transactors—incentives for use
-
- Figure 69: Revolvers and transactors—credit card usage, October 2006
-
- Figure 70: Revolvers and transactors—experiences with credit card advertising, October 2006
-
- Figure 71: Revolvers and transactors—major influence in the choice of the last credit card obtained,
-
- Figure 72: Revolvers and transactors—opinions about credit cards and debit cards, October 2006
- Ownership and usage of cards based on rewards programs
-
- Figure 73: Type of credit card owned, by age, October 2006
-
- Figure 74: Type of credit card owned, by income, October 2006
-
- Figure 75: Type of credit card owned, by race/ethnicity, October 2006
-
- Figure 76: Type of credit card owned, by employment status, October 2006
- Impact of incentives on card usage
-
- Figure 77: Credit card usage, by gender, October 2006
-
- Figure 78: Credit card usage, by age, October 2006
-
- Figure 79: Credit card usage, by income, October 2006
-
- Figure 80: Credit card usage, by race/ethnicity, October 2006
-
- Figure 81: Credit card usage, by employment status, October 2006
- Credit card advertising—what consumers think
- Open rate
-
- Figure 82: Open rate for direct mail credit card advertising, by gender, October 2006
-
- Figure 83: Open rate for direct mail credit card advertising, by age, October 2006
-
- Figure 84: Open rate for direct mail credit card advertising, by race/ethnicity, October 2006
- Responses to types of advertising
-
- Figure 85: Experiences with other credit card advertising, by gender, October 2006
-
- Figure 86: Experiences with other credit card advertising, by age, October 2006
-
- Figure 87: Experiences with other credit card advertising, by income, October 2006
-
- Figure 88: Experiences with other credit card advertising, by race/ethnicity, October 2006
-
- Figure 89: Experiences with other credit card advertising, by employment status, October 2006
- Direct mail advertising—why they open the envelope
-
- Figure 90: Respondents who have a credit card and typically open credit card offers—what would motivate them to open the envelope, by gender and age, October 2006
-
- Figure 91: Respondents who have a credit card and typically open credit card offers—what would motivate them to open the envelope, by income and race/ethnicity, October 2006
- Usage preferences based on perceptions of debit versus credit
-
- Figure 92: Opinions about credit and debit cards, by age, October 2006
-
- Figure 93: Opinions about credit and debit cards, by income, October 2006
-
- Figure 94: Opinions about credit and debit cards, by race/ethnicity, October 2006
-
- Figure 95: Respondents who read statement inserts, by gender and age, October 2006
- The consumer and contactless technology
-
- Figure 96: Respondents who would use contactless technology, by gender and age, October 2006
-
- Figure 97: Respondents who would use contactless technology, by income and ethnicity, October 2006
-
- Figure 98: Respondents who would use contactless technology—what they see as the advantages, by gender and age, October 2006
-
- Figure 99: Respondents who would not use contactless technology—what they see as the disadvantages, by gender and age, October 2006
-
- Figure 100: Respondents who would not use contactless technology—what they see as the disadvantages, by income, October 2006
Future Trends and Forecast
-
- Continued growth in debit usage expected
- Increased competition from debit rewards programs
- “Smarter” marketing replacing generalized offers
- More flexible rewards programs
- Increasing co-branding and partnerships
- Encouraging card usage
- Stored-value cards used in expanded marketplace
- Expanding services to small business
- Alternative payment methods and advertising
- Card authorization via fingerprint
- Targeting consumers beyond use of traditional FICO score
- Targeting ethnic groups
- New venues for using credit cards
- Market forecast
- Credit card charge dollar volume
-
- Figure 101: Forecast of total U.S. credit card charge dollar volume, at current and constant prices, 2005-10
Appendix: Trade Associations
Appendix: Advertising and Promotion
-
- Television
-
- Figure 102: American Express, 2006
- Figure 103: The “One” Card from American Express, 2006
-
- Figure 104: Bank of America Mexicana Visa Platinum credit card, 2006
- Figure 105: CapitalOne No Hassle Rewards Card, 2006
-
- Figure 106: Chase rewards cards, 2006
- Figure 107: Chase rewards cards, 2006
-
- Figure 108: Citi Simplicity Card, 2006
- Figure 109: Discover Card, 2006
-
- Figure 110: Mastercard, 2006
- Figure 111: Mastercard Paypass, 2006
-
- Figure 112: Visa corporate card, 2006
- Direct Mail
-
- Figure 113: VISA/Chase University of Nebraska affinity card advertisement, 2006
- Figure 114: CapitalOne Preferred Plus Platinum card, 2006
-
- Figure 115: Disney rewards VISA card from Chase Bank, envelope creative, 2006
- Figure 116: Citi Professional Card with Thank You Network from Citibank, 2006
Back to top