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Credit Cards - Canada - September 2015

“Although the credit card market in Canada is highly saturated, there are pockets of opportunity such as younger consumers and LGBTs for companies to tap into.”
Sanjay Sharma, Senior Financial Services Analyst

This report looks at the following areas:

  • Finding untapped segments in a largely saturated market
  • The evolution of rewards 
  • New credit scoring models and marketplace lending will attract customers
  • Pre-paid cards, supplemental products and non-reward benefits remain opportunities

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Table of contents

  1. Introduction

      • Methodology
        • Abbreviations
          • Regional classifications
            • Income
            • Executive Summary

                • The market
                  • Canada’s debit and credit card market continues to grow strongly
                    • Market factors
                      • Canada’s economy is in a technical recession
                        • Outlook on the real estate and housing market
                          • Household debt in Canada
                            • Canada’s population is expected to age in the coming years
                              • Companies, brands and innovation
                                • The consumer
                                  • Most Canadians have a credit card, peaking among older consumers
                                    • Figure 1: Ownership of credit cards, July 2015
                                  • RBC, BMO and TD are the top three choices for credit cards
                                    • Figure 2: Choice of FI for primary credit card, July 2015
                                  • No annual fee, easy-to-earn rewards and ease of redemption are the top three factors
                                    • Figure 3: Factors influencing choice of credit cards, July 2015
                                  • Most consumers manage their credit cards online and pay off their balance in full every month
                                    • Figure 4: Agreement with usage habits regarding credit cards, July 2015
                                  • Young males more willing to pay a higher fee for better rewards
                                    • Figure 5: Summary of attitudes about credit cards, July 2015
                                  • What we think
                                  • Issues and Insights

                                      • Finding untapped segments in a largely saturated market
                                        • The facts
                                          • The implications
                                            • The evolution of rewards
                                              • The facts
                                                • The implications
                                                  • New credit scoring models and marketplace lending will attract customers
                                                    • The facts
                                                      • The implications
                                                        • Pre-paid cards, supplemental products and non-reward benefits remain opportunities
                                                          • The facts
                                                            • The implications
                                                            • Trend Application

                                                                • Trend: FSTR HYPR
                                                                  • Trend: Let’s Make a Deal
                                                                    • Trend: Nouveau Poor
                                                                    • Market Factors

                                                                      • Key points
                                                                        • Economic overview
                                                                          • Canada’s economy is in a technical recession
                                                                            • Figure 6: Canada’s GDP, by quarter, Q4 2008-Q4 2014
                                                                            • Figure 7: Household disposable incomes and savings in Canada, by quarter, Q4 2008-Q4 2014
                                                                            • Figure 8: Canada’s unemployment rate, by gender, 2008-15
                                                                          • Impact of interest rates, inflation and exchange rates
                                                                            • Figure 9: Inflation rates in Canada (%), 2004-14
                                                                          • Bank of Canada cuts interest rate to 0.5%
                                                                            • Figure 10: Canada bank rate by month, 2005-15
                                                                          • Outlook on the real estate and housing market
                                                                            • Consumer confidence
                                                                              • Figure 11: Consumer Confidence Index, monthly, January 2008-February 2015
                                                                            • Household debt in Canada
                                                                              • Demographic overview
                                                                                • Population count and growth in Canada
                                                                                  • Figure 12: Share of population of Canada, by territory/province, 2015 (projected)
                                                                                • Minority groups account for less than 20% of Canada’s population
                                                                                  • Figure 13: Estimated population of Canada, by ethnicity, 2011
                                                                                • Canada’s population is expected to age in the coming years
                                                                                  • Figure 14: Population aged 65 years and over in Canada, historical and projected (% of total), 1971-2061
                                                                                  • Figure 15: Projected trends in the age structure of the Canada population, 2014-19
                                                                              • Who’s Innovating?

                                                                                • Key points
                                                                                  • Start-ups focus on alternative models of credit scoring
                                                                                    • Credit scoring companies test the use of alternative data to determine “new” credit scores
                                                                                      • Canadian Tire will be among the first retailers in North America to test proximity-based retailer information cards in Google Now.
                                                                                        • Quantum credit cards that are “impossible” to hack
                                                                                          • Nymi, TD and MasterCard announce the world's first biometrically authenticated wearable Payment using the human heartbeat
                                                                                          • Market Size and Forecast for Credit and Debit Cards

                                                                                            • Key points
                                                                                              • Canada’s debit and credit card market continues to grow strongly
                                                                                                • Figure 16: Value of debit and credit card market ($ billions), forecast, 2015-20
                                                                                              • Forecast
                                                                                                • Figure 17: Forecast of values of transactions in the Canadian debit and credit card market ($ billions), 2010-20
                                                                                              • Forecast of volumes of debit and credit card market
                                                                                                • Figure 18: Volume of debit and credit card market in circulation (millions), forecast, 2015-20
                                                                                                • Figure 19: Volume of debit and credit card market (millions), forecast, 2015-20
                                                                                              • Forecast methodology
                                                                                              • Companies and Products

                                                                                                  • TD Financial Group
                                                                                                    • Overview and company information
                                                                                                      • Recent activity
                                                                                                        • RBC
                                                                                                          • Overview and company information
                                                                                                            • Recent activity
                                                                                                              • Scotiabank
                                                                                                                • Overview and company information
                                                                                                                  • Recent activity
                                                                                                                    • American Express
                                                                                                                      • Overview and company information
                                                                                                                        • Recent activity
                                                                                                                          • Capital One
                                                                                                                            • Overview and company information
                                                                                                                              • Recent activity
                                                                                                                                • Desjardins
                                                                                                                                  • Overview and company information
                                                                                                                                    • Recent activity and innovation
                                                                                                                                    • Brand Communication and Promotion

                                                                                                                                      • Key points
                                                                                                                                        • Capital One is the most active direct mailer
                                                                                                                                          • Figure 20: Credit card acquisition mail volume, by company, July 2014 to July 2015
                                                                                                                                        • Noteworthy brand campaigns
                                                                                                                                          • TD Donates to LGBT organizations for every dollar spent during Pride
                                                                                                                                            • Visa gets poetic in a new campaign for infinite card
                                                                                                                                              • MasterCard showcases its wide acceptance
                                                                                                                                                • Selected direct mail campaigns from Mintel’s Comperemedia
                                                                                                                                                  • Capital One Guaranteed MasterCard
                                                                                                                                                    • American Express Gold from Scotiabank
                                                                                                                                                    • Brand Research and Social Media

                                                                                                                                                      • Key points
                                                                                                                                                        • Market overview
                                                                                                                                                          • Key social media metrics
                                                                                                                                                            • Figure 21: Key social media metrics, September 2015
                                                                                                                                                          • Brand usage and awareness
                                                                                                                                                            • Figure 22: Brand usage and awareness for selected credit card providers, July 2015
                                                                                                                                                          • Interactions with credit card providers
                                                                                                                                                            • Figure 23: Interactions with selected credit card providers, July 2015
                                                                                                                                                          • Social media activity and campaigns
                                                                                                                                                            • What we think
                                                                                                                                                              • Online conversations
                                                                                                                                                                • Figure 24: Online conversations for selected credit card providers, by day, September 14, 2014-September 14, 2015
                                                                                                                                                              • Where are people talking about credit card providers?
                                                                                                                                                                • Figure 25: Online conversations for selected credit card providers, by page type, September 9, 2014-September 9, 2015
                                                                                                                                                              • What are people talking about?
                                                                                                                                                                  • Figure 26: Topics of conversation around selected credit card providers, 9 September, 2014- 9 September, 2015
                                                                                                                                                              • The Consumer – Ownership of Credit Cards

                                                                                                                                                                • Key points
                                                                                                                                                                  • Most Canadians own and use a credit card
                                                                                                                                                                    • Figure 27: Ownership of credit cards, July 2015
                                                                                                                                                                  • Seniors have the highest card ownership
                                                                                                                                                                    • Figure 28: Card ownership, by age, July 2015
                                                                                                                                                                • The Consumer – Choice of Financial Institution

                                                                                                                                                                  • Key points
                                                                                                                                                                    • RBC, BMO and TD are the top three choices for credit cards
                                                                                                                                                                      • Figure 29: Choice of FI for primary credit card, July 2015
                                                                                                                                                                    • Desjardins primary card holders most likely to prefer using card used by their main financial institution
                                                                                                                                                                      • Figure 30: Preference to use card offered by main FI (any agree), by customers of each FI, July 2015
                                                                                                                                                                    • Amex, Desjardins and RBC card holders most satisfied with their customer service
                                                                                                                                                                      • Figure 31: Customer service opinions (any agree), by customers of each FI, July 2015
                                                                                                                                                                  • The Consumer – Choice Factors

                                                                                                                                                                    • Key points
                                                                                                                                                                      • No annual fee, easy-to-earn rewards and ease of redemption are the top three factors
                                                                                                                                                                        • Figure 32: Factors influencing choice of credit cards, July 2015
                                                                                                                                                                    • The Consumer – Channels for Acquisition

                                                                                                                                                                      • Key points
                                                                                                                                                                        • Bank branches remain the top channel to acquire a credit card
                                                                                                                                                                          • Figure 33: Channels used for card acquisition, July 2015
                                                                                                                                                                        • Online channels relatively more popular with younger consumers
                                                                                                                                                                          • Figure 34: Channels of acquisition (net), July 2015
                                                                                                                                                                      • The Consumer – Usage Habits

                                                                                                                                                                        • Key points
                                                                                                                                                                          • Most consumers manage their credit cards online and pay off their balance in full every month
                                                                                                                                                                            • Figure 35: Agreement with usage habits regarding credit cards, July 2015
                                                                                                                                                                          • Males more likely to pay off their balance in full
                                                                                                                                                                            • Figure 36: Usage habits, significant differences by gender, July 2015
                                                                                                                                                                          • Younger card users more likely to have used a prepaid card, switched their primary card and withdrawn cash
                                                                                                                                                                            • Figure 37: Usage habits, significant differences by age, July 2015
                                                                                                                                                                        • The Consumer – Attitudes about Credit Cards

                                                                                                                                                                          • Key points
                                                                                                                                                                            • Summary of attitudes
                                                                                                                                                                              • Figure 38: Summary of attitudes about credit cards, July 2015
                                                                                                                                                                            • Young males more willing to pay a higher fee for better rewards
                                                                                                                                                                              • Figure 39: Attitudes about rewards and supplemental card products, July 2015
                                                                                                                                                                            • Females more likely to be stressed about unpaid card balances
                                                                                                                                                                              • Figure 40: Attitudes about shopping with credit cards, July 2015
                                                                                                                                                                            • Younger consumers and Atlantic Canadians prefer to use the card offered by their main FI
                                                                                                                                                                              • Figure 41: General opinions about credit cards, July 2015
                                                                                                                                                                          • The Consumer – Chinese Canadians and Credit Cards

                                                                                                                                                                            • Key points
                                                                                                                                                                              • Chinese Canadians more likely to pay off balance in full and less interested in using debit cards
                                                                                                                                                                                • Figure 42: Usage habits (select), Chinese Canadians vs Overall Population, July 2015
                                                                                                                                                                              • Cash-back feature ranks high in popularity among Chinese Canadians
                                                                                                                                                                                • Figure 43: Choice factors, Chinese Canadians vs Overall Population, July 2015
                                                                                                                                                                            • The Consumer – Target Groups

                                                                                                                                                                              • Key points
                                                                                                                                                                                • Four target groups
                                                                                                                                                                                  • Figure 44: Four target groups, July 2015
                                                                                                                                                                                • Reluctant Users (34%)
                                                                                                                                                                                  • Prudent Spenders (24%)
                                                                                                                                                                                    • Traditionalists (21%)
                                                                                                                                                                                      • Enthusiasts (20%)

                                                                                                                                                                                      Companies Covered

                                                                                                                                                                                      To learn more about the companies covered in this report please contact us.

                                                                                                                                                                                      Credit Cards - Canada - September 2015

                                                                                                                                                                                      £3,174.67 (Excl.Tax)