Table of Contents
Executive Summary
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- Top takeaways
- Market overview
- Impact of COVID-19 on credit cards
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- Figure 1: Short, medium and longer-term impact of COVID-19 on credit cards, August 2020
- Opportunities and Challenges
- Strong demand for innovative rewards
- COVID-19 could reduce the influence of branch staff while increasing the influence of online reviews
- Brand affiliation matters
- COVID-19 forcing a rethink of rewards
- COVID-19 spurs BNPL
- Repackaging travel rewards in the COVID-19 era
- Younger users more likely to prefer a card issued by their main financial institution
The Market – Key Takeaways
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- Impact of COVID-19 on credit cards
- Interchange fees decline
- Credit card challengers and alternatives
- Credit scoring gets an upgrade
- COVID-19 credit card relief measures
Market Factors
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- Impact of COVID-19 on credit cards
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- Figure 2: Short, medium and longer-term impact of COVID-19 on credit cards, August 2020
- Interchange fees
- Security of mobile wallets
- Credit scoring gets an upgrade
Market Opportunities
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- COVID-19 credit card relief measures
- New credit cards
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- Figure 3: Neo Financial Instagram post, July 2020
- Brim Financial
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- Figure 4: Brim Financial Instagram post, April 2020
- Other challengers to traditional credit cards
- Shopping apps offer another way to earn rewards
Companies and Brands – Key Takeaways
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- Air Canada unveils new loyalty program
- Mogo launches prepaid Visa with automatic carbon offsets
- BNPL takes off
Competitive Strategies
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- Air Canada unveils new loyalty program
- Mogo launches prepaid Visa with automatic carbon offsets
- Buy Now, Pay Later
- Afterpay comes to Canada
- Visa Installments pilots in the US
- Splitit partners with MasterCard to expand BNPL
- Citi introduces Buy Now, Pay Later for Amazon purchases in the US
- Sezzle enters the Canadian market
- COVID-19 spurs BNPL
Marketing Campaigns
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- American Express Canada “Stands tall for small”
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- Figure 5: Amex Shop Small – Supporting Local Businesses, July 2020
- Vancity does its bit to support small businesses in BC
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- Figure 6: When we're open to change, magic happens, June 2020
- RBC motivates customer spending…
- …while CIBC launches revival rewards
- Visa keeps its Olympic sponsorship relevant
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- Figure 7: “Front levers aren’t easy. But washing your hands is” Instagram video, April 2020
- Apple Card (US) increases acquisition activity
The Consumer – What You Need to Know
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- More than four in five Canadians own a credit card
- Credit card choice and usage influenced by rewards
- Consumers value cashback and innovative rewards
- Few are satisfied with COVID-19 relief measures
- Younger consumers more influenced by online reviews
- Most consumers prefer using a physical card
Ownership and Usage
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- More than four in five Canadians own a credit card
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- Figure 8: Ownership of financial products, June 2020
- Credit card ownership by age is three-tiered
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- Figure 9: Credit card ownership, by age, June 2020
- Income and ethnic differences in ownership
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- Figure 10: Credit card ownership, by income, June 2020
Attitudes towards Rewards
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- Credit card choice and usage influenced by rewards
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- Figure 11: Attitudes towards rewards, June 2020
- Around a third of 18-44s find it difficult to understand the rewards system
- Repackaging travel rewards in the COVID-19 era
- Younger consumers more influenced by interest rate and brand affiliation
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- Figure 12: Select attitudes towards rewards (% agree), 18-44s vs over-45s, June 2020
- COVID-19 forcing a rethink of rewards
Reasons Driving Usage
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- Cashback is the top driver of usage
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- Figure 13: Reasons for using primary card, June 2020
- Men and younger users keener on some factors
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- Figure 14: Reasons for using primary card (select), by gender, June 2020
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- Figure 15: Reasons for using primary card (select), 18-44s vs over-45s, June 2020
- Consumers value cashback and innovative rewards
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- Figure 16: Attitudes related to value perception of rewards, June 2020
- Strong demand for innovative rewards
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- Figure 17: Select attitudes related to value perception of rewards (% agree), 18-44s vs over-45s, June 2020
- Young men more willing to pay a fee for better rewards
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- Figure 18: Select attitudes related to value perception of rewards (% agree), by gender, June 2020
- Majority believe rewards are over-estimated
COVID-19 and Credit Cards
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- Few are satisfied with relief measures
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- Figure 19: COVID-19 and credit cards, June 2020
- Younger users have been more impacted
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- Figure 20: COVID-19 and credit cards (select), by age, June 2020
- COVID-19 could reduce the influence of branch staff while increasing the influence of online reviews
Competitive Ecosystem
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- Visa/MasterCard preferred due to their wide acceptance
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- Figure 21: Attitudes related to the credit card competitive ecosystem, June 2020
- Younger consumers more influenced by online reviews
- Younger consumers more likely to prefer a card issued by their main financial institution
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- Figure 22: Attitudes related to the credit card competitive ecosystem (select), 18-44s vs over-45s, June 2020
- Asian Canadians strongly influenced by online reviews
General Attitudes towards Credit Cards
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- Unpaid balances are a significant source of stress
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- Figure 23: General attitudes towards credit cards, June 2020
- Most consumers prefer using a physical card
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- Figure 24: General attitudes (select) towards credit cards (% agree), 18-44s vs over-45s, June 2020
- 18-24s favour debit
- Older consumers and women are more apprehensive about storing card info on their devices
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- Figure 25: General attitudes (select) towards credit cards (% agree), by gender, June 2020
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- Figure 26: Replace Your Lost or Stolen Credit Card, October 2019
- Around a quarter of 18-44s have been rejected for a credit limit increase
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
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