Credit cards can be a convenient way to pay for purchases, but they can also be costly if cardholders don’t use them wisely. Many credit cards come with annual fees that can add up over time, and cardholders who carry a balance will also be charged interest. In addition, many card issuers offer rewards programs that give cardholders points or cash back for their spending. While these programs can be valuable, cardholders should be aware that they often come with restrictions and blackout dates.
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Data for today’s episode is provided by Mercator Advisory Group’s report – 2019 U.S. PaymentsInsights – Credit Cards: Still the Card of Choice
2019 saw a significant increase in cardholders accepting credit card annual fees:
- In 2018, only 29% of cardholders reported paying annual fees. In 2019, 35% of cardholders paid an annual fee.
- Cardholders aged 35-65 showed the greatest increase in cards with annual fees: 36% in 2019, up from 27% in 2018.
- Cardholders with fees increased 8% among ages 18-24, and 7% among ages 24-25.
- Interestingly, among cardholders aged 65+, cards with annual fees declined to 21% in 2019 from 25% the year prior.
- The average consumer holds 2.5 credit cards in 2019.
- 62% of consumers pay their full bill every month.
- 34% of cardholders pay their bill at the card issuers website, while 31% pay at their online bank.
About this report
Mercator Advisory Group’s most recent consumer survey report, Credit Cards: Still the Card of Choice, from the bi-annual North American PaymentsInsights series, reveals that the credit card is U.S. consumers’ preferred method of payment both online and offline.
When shopping in stores, 43% of U.S. consumers prefer to use credit/charge cards, followed by 32% who prefer to use debit and 17% who opt for cash. Further, these findings are on par with last year’s results.
Compared to last year’s survey, more consumers report that merchants are trying to influence their method of paying. For example, this year 59% report that they have seen signs posed by merchants stating credit card minimums, up from 52% in 2018. Also, 46% report stores offering discounts for cash, a result that is up from 40% in 2018.
Consumers are reporting more fraud on their credit cards this year compared to last. In 2019 about 3 in 10 (31%) reported some kind of fraud on their credit cards compared to 24% who did so last year.
With regard to credit card rewards, cash back is still the most common reward earned by U.S. cardholders. Currently, about two-thirds of cardholders (64%) are getting cash back from at least one issuer of the credit cards they hold. Non-travel related points are the second most common reward, which 4 in 10 cardholders report receiving. These findings are consistent with the findings Mercator reported last year.
Credit Cards: Still the Card of Choice, the latest report from Mercator Advisory Group’s Primary Data Service, is based on a sample of 3,002 U.S. adults surveyed in the annual online Payments survey of Mercator’s North American PaymentsInsights series, conducted in June 2019.
The study highlights consumers’ use of credit cards, relative to other payment types, the use of credit card controls, reward programs, new account opening, among other topics.
“The credit card space in the U.S. continues to be dynamic. We see no erosion in consumers’ preference to use their credit cards when shopping. It is still the top-of-wallet payment choice. This report explores some of the key aspects of the credit card business and brings the consumers’ view of the payments world to light,” stated the author of the report, Peter Reville, director of Primary Data Services at Mercator Advisory Group, which includes the North American PaymentsInsights series.
Companies mentioned in the survey results shown include: Acima Credit Affirm, Avant, Bread, Klarna, Lending Club, Prosper, SoFi, and Upstart.