Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- Overview
- The issues
- Outstanding credit crosses the $1 trillion mark
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- Figure 1: Revolving consumer credit outstanding, at current prices, 2013-Q1 2018
- Young people don’t like credit cards
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- Figure 2: Attitudes toward credit cards, by generation, May 2018
- Trust is still an issue
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- Figure 3: Attitudes toward credit cards, May 2018
- The opportunities
- Younger people are becoming more comfortable with debt
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- Figure 4: Percentage of consumers with credit card debt, by age, June 2012-June 2017
- Use rewards to attract young consumers
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- Figure 5: Motivations to apply, by age, May 2018
- Integrate money management into card usage
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- Figure 6: Attitudes toward credit cards, May 2018
- Target young cardholders to switch to mobile wallets
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- Figure 7: Credit card behavior, by age, May 2018
- What it means
The Market – What You Need to Know
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- Debt totals continue to grow
- The number of credit card accounts is up
- Most people have credit card debt
- Direct mail acquisition volume is trending down
- Alternative payment options affect card use
Market Size
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- Total outstanding revolving debt tops $1 trillion
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- Figure 8: Revolving consumer credit outstanding, 2013-Q1 2018
- Growth in number of credit card accounts
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- Figure 9: Number of credit card accounts, Q4 2012-Q4 2017
- Most Americans have credit card debt
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- Figure 10: Percentage of consumers who have credit card debt, June 2012-June 2017
- Figure 11: Percentage of consumers with credit card debt, by age, June 2012-June 2017
Market Perspective
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- Direct mail acquisition volume is trending down
- Alternative payment options affect card use
Market Factors
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- Unemployment
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- Figure 12: Unemployment rate, April 2013-April 2018
- Federal funds rate continues to increase
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- Figure 13: Federal Funds rate, April 2017-March 2018
- Consumers are optimistic about their financial situation
Key Players – What You Need to Know
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- Contactless cards are growing in popularity
- Uber targets Millennials
- Chip cards are helping reduce in-store fraud, but increase online fraud
- Moving cardholders to mobile wallets
- Virtual credit cards
- Biometric credit cards
- Cryptocurrency rewards
What’s Working?
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- Contactless cards are growing in popularity
- Uber targets Millennials
What’s Struggling?
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- Chip cards are helping reduce in-store fraud, but increase online fraud
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- Figure 14: Online shopping frequency, by generation, March 2018
- Moving cardholders to mobile wallets
What’s Next?
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- Virtual credit cards
- Biometric credit cards
- Cryptocurrency rewards?
The Consumer – What You Need to Know
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- Only half of young men have a credit card
- Retail cards are favored by female cardholders aged 45+
- Most have little or no credit card debt
- Qualifying is not the issue
- Many use cards to pay bills
- Most think cards are useful, but are wary of security
- Hispanics are warier of credit
Credit Card Ownership
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- Only half of young men have a credit card
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- Figure 15: Credit card ownership, by gender and age, May 2018
- Hispanics have fewer financial products, including credit cards
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- Figure 16: Financial product ownership, by Hispanic origin, May 2018
- Retail cards are favored by female cardholders aged 45+
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- Figure 17: Type of card owned, by gender and age, May 2018
- Age more of a factor in general purpose card ownership
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- Figure 18: Type of card owned, by age, May 2018
How Much Do Cardholders Owe?
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- Most have little or no credit card debt
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- Figure 19: Amount of credit card debt, by number of cards owned, May 2018
- More than half with highest credit score have no credit card debt
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- Figure 20: Amount of credit card debt, by credit score, May 2018
Why No Credit Cards?
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- Qualifying is not the issue
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- Figure 21: Reasons for not having a credit card, May 2018
- Young people are more responsive to rewards
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- Figure 22: Motivations to apply, by age, May 2018
TURF Analysis
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- Methodology
- It isn’t easy to encourage card ownership
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- Figure 23: TURF analysis – Motivations to apply, May 2018
Credit Card Behavior
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- Many use cards to pay bills
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- Figure 24: Credit card behavior, May 2018
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- Figure 25: Discover email, November 2017
- Figure 26: American Express email, December 2016
- Mobile wallets are much more popular among young cardholders
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- Figure 27: Credit card behavior, by age, May 2018
- Behaviors differ according to credit score
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- Figure 28: Credit card behavior, by credit score, May 2018
Attitudes toward Credit Cards
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- Most think cards are useful, but are wary of security
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- Figure 29: Attitudes toward credit cards, May 2018
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- Figure 30: Citibank email, May 2018
- Young people prefer debit to credit
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- Figure 31: Attitudes toward credit cards, by generation, May 2018
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- Figure 32: Fifth Third credit card direct mail, February 2018
- Hispanics are warier of credit
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- Figure 33: Attitudes toward credit cards, by Hispanic origin, May 2018
- Trust is still an issue
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- Figure 34: Attitudes toward credit cards, all, May 2018
- Income affects attitudes toward cards
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- Figure 35: Attitudes toward credit cards, by household income, May 2018
CHAID Analysis
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- Young men are most receptive to storing credit card information
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- Figure 36: Attitudes toward credit cards – CHAID – May 2018
- Methodology
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- Figure 37: Attitude towards cards – CHAID – Table output, May 2018
Cluster Analysis
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- Figure 38: Credit card clusters, May 2018
- Cluster 1: Credit Averse
- Cluster 2: Credit Cautious
- Cluster 3: Credit Lovers
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- Figure 39: Chase Sapphire Reserve email, October 2017
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Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Consumer survey data
- Direct marketing creative
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