Table of Contents
Scope and Themes
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- What you need to know
- Data sources
- Consumer survey data
- VMS
- Abbreviations and terms
- Abbreviations
- Terms
- Companies mentioned in this report
Executive Summary
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- Industry overview
- Innovation and innovators
- Marketing strategies
- The Canadian credit card consumer
- Asians are a growing and attractive demographic
Insights and Opportunities
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- Key points
- MasterCard issuers would like to entice customers to use their cards more
- What’s going on here?
- Cash rewards cards need to be revamped to boost appeal
- Co-branding can boost card appeal, ease tensions with merchants
Inspire Insights
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- Trend: Non-standard Society
- What’s it about?
- What we’ve seen
- Specifics
- Implications
Market Size and Forecast
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- Key points
- Canadian card market totals C$309 billion in charge volume
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- Figure 1: Card Volume at Canadian Visa and MasterCard Issuers, 2000-10
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- Figure 2: Canadian credit card banks, ranked by outstandings, 2009 and 2010
Competitive Context
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- Key points
- Card industry battles new regulations, price actions
- Code of Conduct takes effect
- Competition Bureau sues Visa, MasterCard over prohibition on surcharging
- Deloitte Canada: Use the current crisis to innovate
- Banks may have an edge over monoline issuers
Segment Performance
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- Key points
- MasterCard is poised to narrow the gap with Visa
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- Figure 3: Visa vs. MasterCard in Canada, 2009-10
- Most big Canadian issuers favor Visa—for now
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- Figure 4: Canadian credit card banks, by brand, 2009-10
- More Canadian banks issue MasterCards
Market Drivers
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- Key points
- Canadian consumer debt levels grow to historic proportions
- Canadian household debt-to-income ratio tops the U.S.
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- Figure 5: 90-day credit card delinquencies at Visa/MasterCard issuers, 2000-10
- Canadian consumer bankruptcy rate also beats the U.S.
- The Bank of Canada is worried
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- Figure 7: Canadian unemployment rate, January 2008-January 2011
Leading Companies
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- Key points
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- Figure 8: Fee income at Canadian credit card banks, 2008-10
- CIBC (Canadian Imperial Bank of Commerce)
- Bank of Nova Scotia (Scotiabank)
- Royal Bank of Canada (RBC)
- TD Bank (Toronto-Dominion)
- Bank of Montreal (BMO)
- MBNA Canada Bank
- Desjardins Group (Fédération des Caisses Desjardins du Québec)
- Canadian Tire Financial Services
- Capital One Bank Canada
- President’s Choice Financial (PC)
- Citigroup
- American Express
- Discover
- HSBC Bank Canada
Innovation and Innovators
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- Key points
- Walmart Canada enters card market with rewards MasterCard
- RBC is first big Visa issuer to offer MasterCard-branded cards
- CIBC, Canada’s largest Visa issuer, launches three MasterCard products
- BMO affinity card targets “new-to-Canada” Chinese
- Capital One Canada partners with Delta Air Lines
- Mobile phone app lets consumers create virtual wallets
- American Express revamps Costco rewards card
Marketing Strategies
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- Key points
- Overview
- Notable direct mail, print, and email advertising
- Delta SkyMiles World MasterCard from Capital One
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- Figure 9: Delta SkyMiles direct mail ad, November 2010
- Aspire Gold MasterCard from Capital One
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- Figure 10: Capital One direct mail ad, December 2010
- Cash Advantage MasterCard from Canadian Tire
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- Figure 11: Canadian Tire direct mail ad, December 2010
- Equal Payment Plan financing from Canadian Tire
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- Figure 12: Canadian Tire direct mail ad, December 2010
- Special Offer from President's Choice Financial
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- Figure 13: President’s choice Financial direct mail ad, August 2010
- BMO Club Sobeys MasterCard from Bank of Montreal
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- Figure 14: Bank of Montreal direct mail ad, November 2010
- More Rewards MasterCard from MBNA Canada
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- Figure 15: MBNA direct mail ad, May 2010
- MBNA Smart Cash Platinum Plus MasterCard from Bank of America
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- Figure 16: MBNA direct mail ad, June 2010
- Shoppers Optimum MasterCard from Bank of America
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- Figure 17: Bank of America direct mail ad, October 2010
- Scotia Momentum Visa card from Scotiabank
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- Figure 18: Scotiabank direct mail ad, December 2010
- TrueEarnings Card from American Express (Costco)
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- Figure 19: American Express/Costco direct mail ad, December 2010
- WestJet RBC World MasterCard from RBC
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- Figure 20: RBC direct mail ad, June 2010
- RBC Visa Cash Back card from RBC
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- Figure 21: RBC direct mail ad, July 2010
The Consumer
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- Key points
- Cards with points are the biggest influence on new card choice
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- Figure 22: Main reason for choosing a credit card, by gender, December 2010
- Building credit is important to young people, those with less income
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- Figure 23: Main reason for choosing a credit card, by age, December 2010
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- Figure 24: Main reason for choosing a credit card, by income, December 2010
- Card choice varies by province
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- Figure 25: Main reason for choosing a credit card, by census region, December 2010
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- Figure 26: Main reason for choosing a credit card, by language, December 2010
- Points cards are most popular, non-rewards cards rank second
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- Figure 27: Types of credit card owned, by gender, December 2010
- Card rewards and age
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- Figure 28: Types of credit card owned, by age, December 2010
- Increasing use of rewards cards correlates with higher income
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- Figure 29: Types of credit card owned, by income, December 2010
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- Figure 30: Types of credit card owned, by income, December 2010
- Quebecois are least interested in earning miles
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- Figure 31: Types of credit card owned, by language, December 2010
- Consumers favor rewards over low rates by two to one
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- Figure 32: Reasons for using credit card, by gender, December 2010
- Those with highest incomes are most interested in rewards
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- Figure 33: Reasons for using credit card, by income, December 2010
- Card preference varies by province
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- Figure 34: Reasons for using credit card, by census region, December 2010
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- Figure 35: Reasons for using credit card, by language, December 2010
- Most cardholders say they pay their balances in full each month
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- Figure 36: Credit card payment activity, by gender, December 2010
- Payment behavior and age
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- Figure 37: Credit card payment activity, by age, December 2010
- Payment behavior and income
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- Figure 38: Credit card payment activity, by income, December 2010
- Payment behavior varies by where people live
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- Figure 39: Credit card payment activity, by census region, December 2010
- Credit is preferred over debit
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- Figure 40: Preferred payment method for purchases, by gender, December 2010
- Age and income correlate with preference for credit cards
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- Figure 41: Preferred payment method for purchases, by age, December 2010
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- Figure 42: Preferred payment method for purchases, by income, December 2010
- Quebecois less likely to favor credit compared to other provinces
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- Figure 43: Preferred payment method for purchases, by census region, December 2010
- Most credit card users stick to one card
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- Figure 44: Number of credit cards used monthly, by gender, December 2010
- Card use and age
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- Figure 45: Number of credit cards used monthly, by age, December 2010
- High income correlates with more cards
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- Figure 46: Number of credit cards used monthly, by income, December 2010
- Card use varies sharply by province
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- Figure 47: Number of credit cards used monthly, by census region, December 2010
- Card use varies by type and size of purchase
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- Figure 48: Purchase categories for credit card use, by gender, December 2010
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- Figure 49: Purchase categories for credit card use, by age, December 2010
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- Figure 50: Purchase categories for credit card use, by income, December 2010
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- Figure 51: Purchase size categories for credit card use, by gender, December 2010
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- Figure 52: Purchase size categories for credit card use, by age, December 2010
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- Figure 53: Purchase size categories for credit card use, by income, December 2010
- Canadians not tied to primary bank for credit cards
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- Figure 54: Primary credit card is issued by company other than primary bank, by gender, December 2010
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- Figure 55: Primary credit card is issued by company other than primary bank, by age, December 2010
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- Figure 56: Primary credit card is issued by company other than primary bank, by income, December 2010
- Quebecois more likely to get cards from primary bank
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- Figure 57: Primary credit card is issued by company other than primary bank, by census region, December 2010
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- Figure 58: Primary credit card is issued by company other than primary bank, by language, December 2010
- Some 12% say they use mobile channel for card activity
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- Figure 59: Conducted credit card business through mobile banking, by gender, December 2010
- Mobile banking use inversely correlated with age
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- Figure 60: Have conducted activities associated with credit card using mobile channel, by age, December 2010
- Higher-income people more likely to use mobile banking
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- Figure 61: Have conducted activities associated with credit card using mobile channel, by income, December 2010
- Quebecois are least likely to use mobile channel
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- Figure 62: Have conducted activities associated with credit card using mobile channel, December 2010
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- Figure 63: Have conducted activities associated with credit card using mobile channel, December 2010
- Visa has a slight edge over MasterCard—at least in our survey
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- Figure 64: Credit card type used most frequently, by gender, December 2010
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- Figure 65: Credit card type used most frequently, by age, December 2010
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- Figure 66: Credit card type used most frequently, by income, December 2010
- Card duality hasn’t reached most consumers
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- Figure 67: Have or have not been offered a different credit card brand, by gender, December 2010
- Youngest group is most interested in getting new card brand
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- Figure 68: Have or have not been offered a different credit card brand, by age, December 2010
- Consumer attitudes toward credit card advertising
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- Figure 69: Attitudes about credit card advertising, by gender, December 2010
- Youngest consumers read card mail, oldest group doesn’t
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- Figure 70: Attitudes about credit card advertising, by age, December 2010
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- Figure 71: Attitudes about credit card advertising, by income, December 2010
- Respondents say mail volume is down
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- Figure 73: Credit card acquisition mail received compared to six months earlier, by gender, December 2010
- Responses indicate card issuers are targeting young people
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- Figure 74: Credit card acquisition mail received compared to six months earlier, by age, December 2010
- Lower-income people are getting less mail
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- Figure 75: Credit card acquisition mail received compared to six months earlier, by income, December 2010
Cluster Analysis
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- Interesteds
- Demographics
- Characteristics
- Opportunity
- Reluctants
- Demographics
- Characteristics
- Opportunity
- Rewarders
- Demographics
- Characteristics
- Opportunity
- Cluster characteristics
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- Figure 77: Canadian credit card clusters, January 2011
- Figure 78: Credit card usage behavior, by Canadian credit card clusters, January 2011
- Figure 79: Behavior toward credit card advertising, by Canadian credit card clusters, January 2011
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- Figure 80: Reason for choosing credit card, by Canadian credit card clusters, January 2011
- Figure 81: Credit card preferences, by Canadian credit card clusters, January 2011
- Cluster demographics
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- Figure 82: Canadian credit card clusters, by gender, January 2011
- Figure 83: Canadian credit card clusters, by age group, January 2011
- Figure 84: Canadian credit card clusters, by household income, January 2011
- Figure 85: Canadian credit card clusters, by race, January 2011
- Cluster methodology
Custom Consumer Groups: Asians
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- Key points
- Asians are a highly attractive—and growing—consumer group
- Asians much prefer credit over debit
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- Figure 86: Preferred payment method, by race, December 2010
- Asians carry many more credit cards than other Canadians
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- Figure 87: Number of credit cards used monthly, by race, December 2010
- Asians use credit for just about all types of purchases
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- Figure 88: Purchase categories for credit card use, by race, December 2010
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- Figure 89: Purchase categories by dollar amount for credit card use, by race, December 2010
- Asians love their rewards cards
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- Figure 90: Types of credit card owned, by race, December 2010
- Asians more likely to use a credit card for business purposes
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- Figure 91: Reasons for using credit card, by race, December 2010
- Asians pay their card bill in full each month
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- Figure 92: Credit card payment activity, by race, December 2010
- Asians eager to apply for other brands of credit cards
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- Figure 93: Offered a different credit card brand, by gender, December 2010
- Asians well ahead of others in using the mobile channel
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- Figure 94: Have used mobile phone to conduct credit card related activities, by race, December 2010
- Asians want rewards, not lower rates
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- Figure 95: Primary reasons for choosing a credit card, by race, December 2010
- Asians pay attention to credit card mail, advertising
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- Figure 96: Attitudes toward credit card advertising, by race, December 2010
- Card issuers are increasingly soliciting Asians
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- Figure 97: Amount of credit card mail received as compared to six months previous, by race, December 2010
Appendix—Trade Associations
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