Despite the rapid growth of alternative payment options, credit cards remain the preferred payment method for many U.S. consumers both online and in-store. Research from Mercator Advisory Group highlights how consumer preferences vary significantly by income level, spending habits, and gender, with different groups placing value on rewards, fraud protection, customer service, and promotional incentives. As issuers continue to compete for top-of-wallet status, understanding these behavioral differences is becoming increasingly important for developing products and rewards programs that resonate with today’s diverse cardholder base.
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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
7 cardholder tendencies by income level and gender:
- Cardholders with annual income >$100K are likely to favor retail sponsored cards with strong rewards
- Cardholders with income $75<100K value incentives in the application process
- Cardholders with income $50<75K value fraud protection and a respected bank name
- Cardholders with income <$50K value customer service, no annual fee, competitive APR, good credit lines
- Men tend to segrate cards for online only purchases only (39%) vs. women (32%)
- Women tend to choose a card for the points (34%) more often than men (29%)
- Men tend to designate a card for paying bills (27%) more frequently than women (21%)
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.
