Table of Contents
Scope and Themes
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- What you need to know
- Scope of this report
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- Industry snapshot
- Current marketing trends
- The credit card consumer
- The consumer by income and risk score
- Competitive landscape
- Recommendations
Market Drivers
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- Consumer and credit card debt
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- Figure 1: Total U.S. transaction volume, fiscal year ending September 30, 2004
- Rewards card usage
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- Figure 2: Type of cards typically used, 2003 and 2007
- Figure 3: Type of “special” cards typically used, 2003 and 2007
- Payment behavior
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- Figure 4: Consumer payment systems, by method of payment, 2000-08
- Figure 5: Number of cardholders and cards, spending and outstanding debt, 2000-08
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- Figure 6: Payment behavior, October 2007
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- Figure 7: Payment behavior, by age, October 2007
- Challenges to retention
- Non-redemption
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- Figure 8: Preferred rewards, August 2006
- Commoditization of rewards programs
- Market saturation
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- Figure 9: Frequency of application for credit card(s), by income, February 2006
- The economy
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- Figure 10: Credit card charge-offs, 2006
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- Figure 11: Credit card charge-offs, January-September 2007
- Marketing trends
- Interchange rates
Competitive Landscape
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- Card Issuer size
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- Figure 12: Top ten issuers of general-purpose credit cards, year-end 2006
- Figure 13: Credit card issuers ranked by receivables, year-end 2005 and 2006
- Market share and usage
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- Figure 14: Market share ranked, by major card type, year-end 2006
- Figure 15: Card usage, by card type, 2001 and 2007
- American Express
- MasterCard
- Visa
- Discover
- Current usage
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- Figure 16: Issuers of cards used most often, by gender, October 2007
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- Figure 17: Issuers of cards used most often, by age, October 2007
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- Figure 18: Cards used most often, by income, October 2007
- Customer satisfaction
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- Figure 19: Credit card customer satisfaction, June and July 2007
- Customer satisfaction—Rewards programs
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- Figure 20: Perceived impact and influence of rewards programs, by demographic categories, April 2007
- Figure 21: Financial services behavior in the past 12 months motivated by rewards, April 2007
- Cross-selling
- Balance transfers
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- Figure 22: Average promotional offer APR (%), Q1 2004-Q1 2007
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- Figure 23: Promotional offer length (months), Q1 2004-Q1 2007
- Balance transfer check mailings
- Convenience checks
- Targeting the unbanked
- Small businesses
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- Figure 24: Rewards valued by small business owners, 2007
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- Figure 25: Rewards offered to businesses, by company, Q2 2007
- Reward preferences
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- Figure 26: Examples of credit card rewards offerings, by age, June 2007
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- Figure 27: Reasons for choosing a particular card, by income, October 2007
- Debit rewards programs
- Loyalty-focused reward trends
- Non-reward rewards
- Innovations in rewards programs
- Instant rewards
- In-house redemption
- Other programs
- Direct mail promotional activity
The Credit Card Consumer
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- Number of cards used
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- Figure 28: Number of cards used in the last 60 days, by gender, October 2007
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- Figure 29: Number of cards carried, by age, October 2007
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- Figure 30: Number of cards carried, by income, October 2007
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- Figure 31: Number of cards carried, by race/ethnicity, October 2007
- Reasons for using a specific card
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- Figure 32: Reasons for using a specific card, by gender, October 2007
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- Figure 33: Reasons for using a specific card, by age, October 2007
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- Figure 34: Reasons for using a specific card, by income, October 2007
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- Figure 35: Reasons for using a specific card, by race/ethnicity, October 2007
- Growth of debit cards
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- Figure 36: Debit card holders, 2000-08
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- Figure 37: Payment methods for transactions of varying sizes, 2007
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- Figure 38: Users of debit reward cards, by age, 2006
- Debit card rewards
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- Figure 39: How rewards would increase debit card usage, 2006
- Marketing for retention
- Balance transfers
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- Figure 40: Credit card payment behavior, by age, October 2007
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- Figure 41: Credit card payment behavior, by income, October 2007
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- Figure 42: Credit card payment behavior, by race/ethnicity, October 2007
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- Figure 43: Balance transfer activity, by race/ethnicity, October 2007
The Credit Card Consumer with Risk Score and Investable Assets
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- By risk score
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- Figure 44: Investable assets, by self-reported risk score, September 2007
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- Figure 45: Number of times checked risk score in the last 12 months, by self-reported risk score, September 2007
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- Figure 46: Number of general-purpose credit cards used in the last 60 days, by self-reported risk score, September 2007
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- Figure 47: Reason for using primary card, by self-reported risk score, September 2007
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- Figure 48: Credit card payment behavior, by self-reported risk score, September 2007
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- Figure 49: Change in credit card payment behavior, by self-reported risk score, September 2007
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- Figure 50: Response rate, HELOC usage, balance transfers, and credit card offer comparison behavior, by self-reported risk score, September 2007
- By investable assets
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- Figure 51: Number of general-purpose credit cards used in the last 60 days, by investable assets, September 2007
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- Figure 52: Reason for using primary card, by investable assets, September 2007
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- Figure 53: Credit card payment behavior, by investable assets, September 2007
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- Figure 54: Change in credit card payment behavior, by investable assets, September 2007
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- Figure 55: Response rate, HELOC usage, balance transfers, and credit card offer comparison behavior, by investable assets, September 2007
Advertising and Promotion
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- Direct mail
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- Figure 56: Top ten debit card direct mail companies, 2004-06, ordered by 2005 volume
- Internet
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- Figure 57: Percentage of adults online, by gender, age, race/ethnicity and income, 2007
- Increased segmentation in marketing
- The affluent
- Teens
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- Figure 58: Bank product ownership, by age, 2007
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- Figure 59: Teenagers who have used a credit card in the past 12 months, by type of transaction, by age, 2006
- Graduate students
- Marketing to graduate students
- Generation Plastic
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- Figure 60: Share of dollars spent using plastic, by age, August 2006
Future Trends
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- More targeted marketing, less mass mailing
- Increased electronic marketing
- Increasingly sophisticated technology
- Creativity in rewards programs
- Relationship banking
- Small business rewards
Appendix: Advertising and Promotion
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- Figure 61: Banco Popular debit card mailing, September 2007
- Figure 62: American Express email retention mailing, 2007
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- Figure 63: Washington Mutual direct mail retention mailing, 2007
- Figure 64: Visa Print ad in the San Jose Mercury News, September 2007
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- Figure 65: American Express reward Print advertisement, 2007
- Figure 66: Visa check card experiential rewards advertisement, 2007
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- Figure 67: Example of reminder email from Orchard Bank/HSBC
- Figure 68: Capital One rewards redemption reminder, October 2007
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- Figure 69: Citi Dividend Platinum Select card balance transfer direct mail advertisement, October 2007
- Figure 70: Wells Fargo/PG&E debit card direct mail advertisement, 2007
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- Figure 71: Discover credit limit increase notification letter, October 2007
- Figure 72: Southwest Bank Platinum check card, July 2007
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- Figure 73: American Express/Costco co-branded card, October 2007
- Figure 74: Union Bank debit direct mail advertisement, 2007
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- Figure 75: Eagle Federal Credit debit rewards card print advertisement, 2007
- Figure 76: Visa debit card print advertisement, 2007
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- Figure 77: College reward Visa card mailed in February and March 2007
- Figure 78: Chase convenience check mailing, April 1007
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- Figure 79: Union Bank convenience check mailing, August 2007
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