American consumers spent over $6.5 billion on-line during the 1998 holiday season, with over 90% of it charged on credit cards. With this rapid growth of the internet as an enormous “Mall of the World”, credit card issuers are scrambling to make their card the on-line shopper’s favorite. The primary tactic in this effort is to give consumers immediate benefits for using a particular credit card when buying on-line. These benefits include merchandise discounts, money safety guarantees, air miles and credit against outstanding card balances. Specific data regarding this new credit card battleground emerged from a just completed consumer-based study conducted by Atlanta-based, Brittain Associates. The study is being released to subscribers today.
“About one half of all on-line shoppers who use a credit card claim that they always use just one card on-line,” says Bruce Brittain, president. “I think that on-line card usage perks to encourage such behavior will become a hotter competitive area as issuers try to make their card the on-line favorite.”
Among the issuers who currently have cards that are frequently mentioned as favorites for on-line purchases are First USA, American Express, Citibank, Discover and MBNA.
Some issuers are also providing on-line customer service capabilities such as bill review and bill payment. Consumers overwhelmingly say that this gives these cards a competitive advantage.
“The data clearly show,” says Brittain, “that card owners who can review their statements or pay their bills on-line favor that card over other cards they own.”
According to Brittain, as the number of households in the U.S. who regularly use the internet climbs beyond the 34.7 million identified in this study, carving out a competitive advantage based on internet related issues will become am important strategy for issuers.
The study, the second in a planned series, indicates that the growth rate in the number of internet active adults in the U.S. is currently at 26% per year, up from 51.3 million measured last September to 57.9 million measured in March, 1999.
A full description of the study methodology, lines of inquiry and examples of selected results can be found at the research firm’s website: [www.brittainassociates.com].