Credit Cards - UK - August 2016
“Consumers are price sensitive when it comes to credit cards, attracted by the best reward schemes and longer interest-free periods. However, cards that offer longer-term value are more likely to guarantee customer loyalty. Mintel’s consumer research shows that two in five consumers think that the interest rate is the most important factor when looking for a credit card.”
– Jessica Galletley, Financial Services Analyst
This report looks at the following areas:
- Doing more to help ‘minimum repayers’ avoid difficulties
- Virtual cards will change credit-spending habits
- Credit card market sees low levels of switching
This Report examines the credit card market and key developments and drivers of the market. It includes analysis of major providers and their competitive strategies. This Report explores consumer ownership of payment cards, as well as levels of credit card debt and intentions towards future use of credit cards. It will also explore their likelihood to switch providers and borrowing intentions over the next 12 months. It also looks at the key features people look for when choosing a credit card and how these needs are met by different types of providers.
For the purposes of this Report, Mintel has used the following definitions:
Credit card – is a plastic payment card, which allows the cardholder to pay for goods and services on credit, up to an agreed limit. It offers an added advantage over paying by debit card, in that purchases over £100 (and up to £30,000) are covered under Section 74 of the Consumer Credit Act. It can also be used for cash acquisition, although there is usually an additional fee for ATM withdrawals.
The credit facility allows the cardholder to have a revolving balance, which can be paid off over a period of time. There is typically an interest-free period of up to 56 days from the date of purchase, after which time interest will be charged on any outstanding balance. If balances are not repaid in full, the cardholder will be required to make a minimum monthly payment (usually the higher of £25 or 1% of the balance, plus any interest owed).
It is also common for credit cards to come with extra features and services, such as cashback on purchases, and some are attached to a reward or loyalty scheme.
Charge card – is like a credit card except the balance must be paid off in full at the end of each billing cycle. Fees are imposed if this requirement is not met. Some charge cards do not impose a credit limit, giving the cardholder a limitless amount of credit. Most charge cards are attached to a reward scheme.
What you get
This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.
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* This is a sample representation of the report layout and does not reflect the research included in this report.
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