While credit card ownership remains relatively flat, user demographics are changing as young adults return to credit card use. Over half of young adult in the U.S. now use credit cards, especially the 25-34 year olds, who now are as likely as average to do so.
A new report from Boston-based Mercator Advisory Group also found young adults are now more likely than average to use co-branded credit cards, yet they are also more likely than average to keep the credit cards issued by their primary financial institution (FI) “top of wallet”: 64% of young adult credit cardholders report that they use their credit card issued by their primary financial institution most often. Smartphone owners (52%) and those who also own tablets (57%), especially those who have paid for goods and services by mobile phone (78%) are more likely than average to use the credit card issued by their primary FI most often.
Additionally, the latest report from Mercator Advisory Group’s Primary Data Service, shows that the new cardholders are especially likely to use co-branded cards to extend their credit. Mercator Advisory Group suggests that higher credit card limits along with lower fees and more valuable reward programs will motivate many to increase spending on their credit cards.
This study examines the demographic shift and changing landscape of credit card use, use of co-branded credit or charge card programs by type, shift of credit card use to other payment types, consumer experience of changing fees, APRs, balances and comfort with borrowing on their credit cards and motivators to increase borrowing and credit card spending, application channels used for general purpose credit cards and store credit cards and consumers notice of and reaction to merchant rules for credit card use and interest in mobile-based account controls.
Mercator further notes credit card user demographics are changing and new cardholders, who appear to be predisposed to keeping their primary financial institution’s credit card at top of wallet, are demanding new tools, more valuable rewards, and higher credit limits to stimulate their use.
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