Credit card spend motivators include everything from enticing sign-up bonuses to cashback and rewards programs. Many cardholders are attracted to the convenience of being able to pay for purchases directly with plastic rather than having to carry cash or a checkbook. Credit cards, along with other forms of electronic payments, such as online payment gateways, also help to provide an additional layer of security when making transactions. At the same time, those motivated to use their cards wisely can gain a wealth of benefits, including the building of good credit and even discounts and special offers if they are members of loyalty programs.
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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.
Consumers in 2019 have different motivators for credit card spend than last year:
- In 2018, 33% of consumers said “nothing” would change their credit spend
- In 2019, only 25% of consumers said “nothing” would change their card spend
- ‘Broader acceptance by merchants’ & ‘higher credit limits’ were both factors cited by 4-8% more consumers in 2019
- More valuable rewards programs and lower fees were also potentials that would increase spend
- 10% more men ‘wish they had more credit’ than women
- Men are also 12% more likely to make automatic monthly payments to their credit cards
- 46% of consumers would prefer their card issuer not increase their credit line without notice
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.
