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Australian Credit Card Customers 2008

  • Publication Date:April 2008
  • Publisher:Datamonitor
  • Product Type: Report
  • Pages:107

Australian Credit Card Customers 2008

Introduction

Australian credit card customers 2008 is an invaluable insight into the behaviour and preferences of Australian credit card holders. The report focuses on key issues including card spending reasons for card choice and preferred providers and sales channels. Each chapter concludes with a section that draws together the key findings and explains the relevance for providers.

Scope

Based on Datamonitor's Australian Financial Services Survey of 2 000 adult consumers

Survey conducted in December 2007

Analysis broken down by parameters including gender age state and income

Survey findings related to specific providers

Report Highlights

There is a high level of satisfaction towards credit card providers although it is highest towards smaller players and credit unions in particular. 50% of consumers who have their main credit card with a credit union are very satisfied with their provider.

Datamonitor's research asked consumers for their views on the following statement - 'I feel that the rewards that I get from my card make up for the annual fee that I pay'. Consumers' responses underlined both scepticism towards the value of reward schemes and annoyance at the level of annual fees.

More consumers would like to arrange their credit card online than are currently doing so. While only 26% of consumers aged 35-44 arranged their main credit card online 41% would like to do so. Similarly while only 20% of consumers aged 45-54 arranged their credit card online 32% would like to do so.

Reasons to Purchase

Confirm what consumers look for when choosing a credit card

Quantify the benefit of card features such as reward schemes and balance transfer offers

Better understand consumers' channel preferences when arranging a credit card

  • Datamonitor View
  • Catalyst
  • Summary
    • Executive Summary
    • Market Overview
    • Credit Card Ownership and Usage
    • Influences on Credit Card Choice
    • Attitudes towards Credit Card Providers
    • Effectiveness of Credit Card Sales Channels
    • Table of Figures
    • Table of Tables
    • Market Overview
    • The Australian Credit Card Market Has Powered to New Heights
    • Credit Card Balances Now Surpass $40 Billion
    • The Number of Cards on Issue Doubled in The Ten Years to 2007
    • The Credit Card Market Cooled in 2007
    • The Total Number of Credit Card Purchases Is Still Increasing but Is Doing So More Slowly
    • New Credit Card Applications Have Slowed
    • Westpac Remains The Largest Credit Card Issuer
    • Visa and Mastercard Remain The Dominant Card Schemes
    • Ascendant Players Have Driven Credit Card Market Competition
    • Virgin Has Challenged The Credit Card Status Quo
    • The Ending of The Virgin/Westpac Relationship Was Inevitable Given The Success of The Virgin Credit Card
    • Bankwest and Citigroup Have Grown Their Market Share
    • There Is Increasing Competition in The Low Rate Space
    • 0% Balance Transfer Offers Now Litter The Market
    • The Australian Market Is following The UK's Lead on Balance Transfer Offers
    • Conclusion
    • Credit Card Ownership and Usage
    • Many Consumers Hold Multiple Cards and Maintain Long Relationships with Their Card Issuer
    • Almost One-Third of Consumers Hold More than One Credit Card
    • Men Are More Likely to Hold Two or More Cards than Women
    • A Consumer's Relationship with A Card Issuer Usually Lasts More than Five Years
    • Growth in The Credit Card Market over The next 12 Months Will Come from Existing Cardholders
    • Wide Credit Card Acceptance and Frequency of Usage Drive Spending
    • Overseas Transactions and Clothing and Footwear Drive Credit Card Usage
    • Overseas Card Usage Is Driven by Convenience and Wide Acceptance
    • Men Are More Likely to Use A Credit/Charge Card than Women for Many Types of Purchases
    • Young Adults Are Least Likely to Identify Their Credit Card as A Common Payment Method
    • Consumers Generally Seem to Be Keeping Their Card Spending in Check
    • Men Spend More on Their Main Credit Card than Women
    • Consumers Aged 45-54 Are The Biggest Spenders on Their Main Credit Card
    • Victorians Spend More than Queenslanders on Their Main Credit Card
    • High Earners Spend Heavily on Their Credit Cards
    • Many Consumers Do Revolve A Card Balance from Month-to-Month
    • More than Half of Cardholders Fail to Pay off Their Credit Card Balance in Full Every Month
    • Women Are Less Likely than Men to Pay off Their Balance in Full Each Month
    • Older Consumers Are Most Likely to Repay Their Card Balance in Full Each Month
    • Lower Earners Are Less Likely to Clear Their Card Balance Each Month
    • One- in-Four Cardholders Admits to Using Their Card to Make Purchases They Could Not Afford
    • Consumers Do Not See Revolving A Balance as 'Borrowing'
    • Consumers Are Comfortable with Their Credit Limits
    • More than 40% of Consumers Have A Credit Limit of Less than $5,000
    • Almost 80% of Consumers Believe That Their Credit Limit Is at The Right Level
    • Younger Cardholders Are More Likely to Believe That Their Credit Limit Is Too Low
    • Few Consumers Have Consolidated Debts onto Their Main Credit Card
    • Conclusion
    • Influences on Credit Card Choice
    • Fees and Rates Are Big Factors Influencing Card Choice
    • More than 80% of Consumers Believe That Low Rates Are An Appealing Feature When Choosing A New Card
    • Low Fees Are Important to All Age Groups While The Importance of Other Features Decreases with Age
    • Balance Transfer Offers Appeal to 45% of Consumers
    • There Is Consumer Indifference towards Reward Schemes
    • More than One Third of Cardholders Do Not See The Value in Rewards Schemes
    • Almost Half of Cardholders Say That The Opportunity to Earn Points Does Not Increase Their Card Spending
    • Only around One-Quarter of Cardholders Say That They Try to Redeem Points at Least Once per Year
    • Many Cardholders Feel That The Benefits of Their Reward Scheme Are Outweighed by The Annual Fee They Pay
    • Reward Schemes Are failing to Engage Consumers
    • The Different Attributes of Banks and Non-Banks Influence Choice of Card Provider
    • Existing Relationships Give Banks The Advantage
    • Rewards Schemes Do Win Some Customers
    • Rewards Drive Acquisition for Amex
    • The Non-Banks Are Winning Business Based on A Low Rate, Low Fees Proposition
    • Younger Consumers Are Most Likely to Choose A Provider Based on A Low Cost Proposition
    • Many Consumers Choose to Bundle Their Financial Products
    • Gifts, Endorsements, Affinity Partnerships and Telephone Sales Do Not Win Business
    • Competition and Aversion to High Fees and Rates Drive Card Cancellation
    • Consumers Will Cancel A Credit Card If They Receive A Better Offer
    • High Interest Rates Drive Card Cancellation
    • The Annoyance of Annual Fees Also Drives Card Cancellation
    • Poor Service Is More Likely to Drive A Man to Cancel A Credit Card than A Woman
    • High Interest Rates Are Most Likely to Cause Consumers in Their 30s and 40s to Cancel Their Credit Card
    • Conclusion
    • Attitudes towards Credit Card Providers
    • Consumers Display High Levels of Satisfaction towards Credit Card Providers
    • Almost Two-Thirds of Cardholders Are Satisfied with Their Credit Card Provider
    • Women Are More Satisfied with Their Main Credit Card Provider than Men
    • Uncompetitive Pricing and High Fees Are Again Key Sources of Dissatisfaction
    • Credit Unions Win The Customer Satisfaction Stakes
    • More than 50% of Consumers Holding Credit Union Credit Cards Are Very Satisfied
    • The Big Four Achieve Similar Levels of Customer Satisfaction
    • Consumer Inertia Makes Market Entry by Non-Traditional Providers Difficult
    • Consumers Strongly Favour Traditional Providers
    • 73% of Consumers Would Take out A Credit Card Issued by A Bank, but Only 4% Would Do So from A Utility Company
    • Consumers Are Also Unwilling to Purchase Other Financial Products from Non-Traditional Providers
    • Conclusion
    • Effectiveness of Credit Card Sales Channels
    • The Internet Is An Effective Secondary Credit Card Sales Channel behind The Branch
    • Face-to-Face Remains The Preferred Sales Channel
    • The Internet Is Proving An Effective Credit Card Sales Channel
    • Younger Consumers Are More Inclined to Arrange Their Credit Card over The Internet
    • Men Are More Likely to Use The Internet to Arrange A Credit Card than Women
    • Bankwest and Citigroup Are among Those Players Benefiting Most from The Online Channel
    • More Consumers Would like to Arrange Their Credit Card Online
    • 41% of Consumers Aged 35-44 Would like to Arrange Their Credit Card Online
    • Only 32% of Consumers Say They Would Never Arrange A Credit Card Online
    • Conclusion
  • Appendix
    • Data Tables
    • Market Overview
    • Credit Card Ownership and Usage
    • Influences on Credit Card Choice
    • Attitudes towards Credit Card Providers
    • Effectiveness of Credit Card Sales Channels
    • Further Reading
    • Ask The Analyst
    • Datamonitor Consulting
    • Disclaimer
  • List of Tables
    • Table 1: Credit Card Balances Outstanding, 2002-2007
    • Table 2: Number of Credit/Charge and Multi-Function Cards on Issue, 1994-2007
    • Table 3: Number of Credit Card Purchases, 2002-2007
    • Table 4: Credit Card Balances Outstanding by Card Issuer, December 2007
    • Table 5: Card Scheme Shares of Total Number and Value of Purchases, December 2007
    • Table 6: Bankwest Credit Card Balances Outstanding, 2002-2007
    • Table 7: Number of Credit Cards Held by Consumers
    • Table 8: Number of Credit Cards Held by Consumers, by Gender
    • Table 9: Number of Credit Cards Held by Consumers, by State
    • Table 10: Number of Credit Cards Held by Consumers, by Age
    • Table 11: Number of Credit Cards Held by Consumers, by Personal Income before Tax
    • Table 12: Length of Time Cardholders Have Held Their Main Credit Card
    • Table 13: Consumers Planning to Take out New Financial Products in The next 12 Months
    • Table 14: Payment Method Used Most Commonly When Abroad
    • Table 15: Percentage of Consumers Indicating That Their Credit Card Is Their Preferred Payment Method for Different Purchase Types, by Gender
    • Table 16: Percentage of Consumers Indicating That Their Credit Card Is Their Preferred Payment Method for Different Purchase Types, by Age
    • Table 17: Credit Card Spending per Month
    • Table 18: Credit Card Spending per Month, by Gender
    • Table 19: Credit Card Spending per Month, by Age
    • Table 20: Credit Card Spending per Month, by State
    • Table 21: Credit Card Spending per Month, by Personal Income before Tax
    • Table 22: Proportion of Balance of Main Credit Card Paid off Each Month
    • Table 23: How Often Cardholders Pay Interest on Their Main Credit Card, by Gender
    • Table 24: Proportion of Balance of Main Credit Card Paid off Each Month, by Age
    • Table 25: How Often Cardholders Pay Interest on Their Main Credit Card, by Age
    • Table 26: Proportion of Balance of Main Credit Card Paid off Each Month, by Personal Income before Tax
    • Table 27: How Often Cardholders Pay Interest on Their Main Credit Card, by Personal Income before Tax
    • Table 28: Consumers' Views on The following Statement - I Sometimes Buy Things I Cannot Really Afford on My Credit Card
    • Table 29: Consumers' Views on The following Statement - I Only Use My Credit Card for Making Purchases, and Never to Borrow Money
    • Table 30: Credit Limits Held by Cardholders with Personal Income before Tax of Less than $20,000
    • Table 31: Views on Credit Limit on Main Credit Card
    • Table 32: Views on Credit Limit on Main Credit Card among Cardholders Aged 18-24 Years
    • Table 33: Consumers Who Have Consolidated Debts on Their Main Credit Card
    • Table 34: Consumers Who Have Consolidated Debts on Their Main Credit Card, by Personal Income before Tax
    • Table 35: Consumers Who Have Consolidated Debts on Their Main Credit Card, by Age
    • Table 36: Features Consumers Regard as Appealing When Choosing A New Credit Card
    • Table 37: Features Consumers Regard as Appealing When Choosing A New Credit Card, by Gender
    • Table 38: Features Consumers Regard as Appealing When Choosing A New Credit Card, by Age
    • Table 39: Consumers' Views on The following Statement - I Don't See The Value in Reward Schemes Because I Do Not Spend Enough to Get Any Good Rewards
    • Table 40: Percentage of Cardholders Who Chose Their Credit Card Provider Due A Low Interest Rate on Purchases or No Fees, by Provider
    • Table 41: Percentage of Cardholders Who Chose Their Credit Card Provider Because They Wanted to Bundle Their Financial Products
    • Table 42: Reasons Why Consumers Cancelled Their Last Credit Card
    • Table 43: Reasons Why Consumers Cancelled Their Last Credit Card, by Gender
    • Table 44: Reasons Why Consumers Cancelled Their Last Credit Card, by Age
    • Table 45: Consumer Satisfaction Levels towards Main Credit Card
    • Table 46: Consumer Satisfaction towards Providers of Financial Products
    • Table 47: Consumer Satisfaction towards Main Credit Card Provider, by Gender
    • Table 48: Consumer Satisfaction towards Main Credit Card Provider, by Age
    • Table 49: Reasons Why Consumers Are Dissatisfied with Their Main Credit Card Provider
    • Table 50: Consumer Satisfaction towards Main Credit Card Provider, Credit Unions
    • Table 51: Consumer Satisfaction towards Main Credit Card Provider, 'Big Four' Banks
    • Table 52: Willingness of Consumers to Consider Credit Cards Offered by Different Types of Provider
    • Table 53: How Consumers Arranged Their Financial Products
    • Table 54: Consumers Who Arranged Their Credit Card in The Branch or Online, by Age
    • Table 55: How Consumers Arranged Their Credit Card, by Gender
    • Table 56: Percentage of Consumers Whose Main Credit Card Is Provided by The Highlighted Issuers That Arranged Their Credit Card Online
    • Table 57: Percentage of Consumers That Would like to Arrange Their Financial Products Online
    • Table 58: How Consumers Arranged Their Credit Card Compared to How They Would like to Do So, by Age
    • Table 59: Make up of Consumers Who Would Never Consider Arranging A Credit Card Online, by Age
  • List of Figures
    • Figure 1: More than 30% of Cardholders Only Manage to Repay Less than Half of The Balance of Their Main Credit Card Each Month
    • Figure 2: Credit Unions Have The Highest Levels of Satisfaction among Their Credit Card Customers - More than Half of Credit Union Cardholders Are Very Satisfied
    • Figure 3: While Younger Consumers Have Embraced The Internet, Older Consumers Are Not Moving Away from The Branch So Readily
    • Figure 4: Credit Card Balances Outstanding Now Surpass $40 Billion, with More than 70% of Balances Incurring Interest
    • Figure 5: There Were Almost 23 Million Credit Cards on Issue in Australia in 2007, More than Double The Number on Issue Ten Years Ago
    • Figure 6: 1.35 Billion Credit Card Purchases Were Made on Australian Credit Cards in 2007, up by 6.2% in 2007
    • Figure 7: Westpac Is Australia's Largest Credit Card Issuer Based on Outstandings, with 23% of The Market
    • Figure 8: The Positioning of American Express and Diner's Club Cards to The Mass Affluent Gives These Card Schemes A Larger Share of The Total Value of Purchases than of The Total Number of Purchases
    • Figure 9: Bankwest Has Enjoyed Double Digit Growth in Its Credit Card Balances Outstanding during Each of The Last Five Years
    • Figure 10: Almost One-Third of Consumers Have Two or More Credit Cards
    • Figure 11: 39% of Cardholders Aged 65 and over Own More than One Credit Card, Compared with Only 13% of Cardholders Aged
    • Figure 12: Multiple Cardholding Is More Common among Higher Income Consumers, with More than Half of Cardholders Earning above $80,000 Owning Two or More Cards
    • Figure 13: The Relationship between A Customer and Credit Card Issuer Usually Lasts at Least Five Years, and in Many Cases Ten Years or More
    • Figure 14: Only 5% of Consumers Plan on Taking out A New Credit Card in The next 12 Months
    • Figure 15: 40% of Consumers Prefer to Use Their Credit or Charge When Purchasing Clothing and Footwear or When Overseas
    • Figure 16: in General Men Are More Likely than Women to Have Their Credit Card as A Preferred Payment Method, with 36% of Men Commonly Using A Credit/Charge Card When Eating out, Compared to 26% of Women
    • Figure 17: Only 13% of Cardholders Spend More than $2,000 per Month on Average on Their Main Credit Card
    • Figure 18: The Biggest Credit Card Spenders Are Aged 45-54 - 17% of 45-54 Year Olds Spend More than $2,000 per Month, Compared with 9% of 18-24 Year Olds
    • Figure 19: There Is A Clear Correlation between Income and Card Spending with 52% of Cardholders Earning $100,000 or More Spending Upwards of $2,000 per Month on Their Credit Card, Compared to Only 7% of Cardholders Earning $20,000 - $40,000
    • Figure 20: More than 30% of Cardholders Only Manage to Repay Less than Half of The Balance of Their Main Credit Card Each Month
    • Figure 21: 47% of Women Say That They Pay Interest on Their Main Credit Card at Least Every Other Month, Compared with Only 40% of Males
    • Figure 22: Almost Half of Cardholders in The Lowest Income Groups Pay Interest on Their Main Credit Card at Least Every Other Month, Compared with Less than A Quarter of Cardholders in The Highest Income Group
    • Figure 23: One-in-Four Cardholders Admits to Using Their Credit Card to Buy Things They Cannot Afford
    • Figure 24: Cardholders Do Not See Revolving A Credit Card Balance as Borrowing - Only 13% of Cardholders Admits to Borrowing on Their Card
    • Figure 25: More than One-in-Four of Cardholders with An Income of Less than $20,000 Have A Credit Limit Greater than $5,000
    • Figure 26: Four out of Five Cardholders Are Happy with Their Current Credit Limit
    • Figure 27: Cardholders Aged 18-24 Are Most Likely to Believe Their Credit Limit Is Too Low - 18% of 18-24 Year Olds Would like A Higher Limit
    • Figure 28: Only 11% of Cardholders Have Consolidated Credit Card and/or Personal Loan Debt onto Their Main Credit Card
    • Figure 29: More than 85% of Consumers Believe That Lower Fees Are An Appealing Feature When Choosing A New Credit Card
    • Figure 30: Younger Consumers Are More Likely to Regard A Lower Rate on Purchases as An Appealing Feature When Choosing A New Card - 64% of 18-24 Year Olds Say That Lower Rates Are An Attractive Card Feature
    • Figure 31: 57% of Consumers Aged 18-24 Believe That An Interest Free Balance Transfer Offer Is Appealing When Choosing A New Card, Compared to 40% of Consumers Aged
    • Figure 32: Consumers Are Fairly Indifferent to The Value of Reward Schemes with 36% of Cardholders Believing They Can Earn Good Rewards, but 32% Believing They Are Unable to Do So
    • Figure 33: Reward Points Do Not Encourage Card Spending - 49% of Cardholders Do Not Spend Extra Just to Earn Points
    • Figure 34: Less than 20% of Cardholders Aged 18-24 Agree or Strongly Agree with The Statement 'I Enjoy The Benefits of The Reward Scheme and Try to Redeem Points at Least Once A Year', Compared with at Least 27% of Cardholders in All Other Age Groups
    • Figure 35: 43% Consumers Feel That The Annual Fee on Their Card Outweighs Any Benefit They Receive from The Card's Reward Scheme
    • Figure 36: Collectively The Big Four Banks Win More than 30% of Their Credit Card Business Based, at Least in Part, on An Existing Relationship with The Customer
    • Figure 37: More than Half of American Express Cardholders Chose The Card Because of Its Rewards Scheme
    • Figure 38: Low Rates and Fees Are Winning Business for Virgin, Aussie and Wizard over The 'Big Four'
    • Figure 39: 25% of Westpac Cardholders Chose The Bank Because They Could Bundle Their Financial Products
    • Figure 40: Cardholders Will Cancel A Card If They Believe The Interest Rate Is Too High or If They Are Concerned about Getting into Too Much Debt
    • Figure 41: Consumers Aged 35-44 Are The Most Likely to Have Cancelled Their Last Credit Card Because of High Interest Rates or Because They Felt They No Longer Needed The Card
    • Figure 42: Consumer Satisfaction towards Credit Card Providers Is High but Is Lower than towards The Providers of Other Financial Products
    • Figure 43: Credit Unions Have The Highest Levels of Satisfaction among Their Credit Card Customers - More than Half of Credit Union Cardholders Are Very Satisfied
    • Figure 44: The 'Big Four' Have Comparable Credit Card Customer Satisfaction Indicators, Although with 68% of Its Credit Card Customers Very or Quite Satisfied Anz Is Doing Best
    • Figure 45: Consumers Are Generally Unwilling to Consider A Credit Card from Non-Traditional Providers Including Utilities and Supermarkets
    • Figure 46: 53% of Consumers Arranged Their Credit Card in A Branch, More than Did So for Their Investments or Life Insurance but Less than for Their Mortgage and Personal Loan
    • Figure 47: While Younger Consumers Have Embraced The Internet, Older Consumers Are Not Moving Away from The Branch So Readily
    • Figure 48: Men Are More Inclined to Arrange A Credit Card Online - 27% of Men Arranged Their Credit Card Online, Compared to 21% of Women
    • Figure 49: The Likes of Bankwest, Citigroup, Virgin and Hsbc Are Outdoing The Big Four Based on The Percentage of Their Customers Who Use The Internet to Arrange Their Credit Cards
    • Figure 50: More Consumers Would like to Arrange Their Credit Card Online than Any Other Financial Product
    • Figure 51: More Consumers Would like to Arrange Their Credit Card Online than Are Currently Doing So, Particularly among Older Consumers
    • Figure 52: Consumers Who Are Unwilling to Use The Internet to Arrange A Credit Card Are Most Likely to Be Aged 65 and over
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