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Mass Affluent and Credit Cards - US - February 2009

This report expands on the analysis presented in Mintel’s Who Are the Mass Affluent?—U.S., April 2008, specifically focusing on the relationship between these consumers and the credit card industry. The attitudes, behaviors and values of mass affluent consumers are all examined. The impact of current economic conditions on both mass affluent consumers and credit card issuers is also analyzed.

Some of the major themes of this report include:

  • Economic conditions weakened dramatically in 2008. Housing prices and equity markets both declined at historic rates, dramatically impacting the mass affluent consumer. Turmoil in the financial markets has resulted in turmoil in the financial services industry, creating both opportunities and risks for credit card issuers
  • Mass affluents are heavy users of credit cards and rely on their cards for more than half of all their purchases. They also spend significantly more via payment cards than the average consumer. Thus changes in spending habits will have a significant impact on credit card usage
  • Some 60% of credit card issuers are revising lending standards, further tightening mass affluent consumers’ access to credit

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Scope of this report
        • Consumer survey data
          • Abbreviations and terms
          • Executive Summary

            • Industry highlights
              • Changing financial landscape
                • Advertising trends
                  • Market demographics and opportunities
                  • Insights and Opportunities

                    • Key points—one size fits all
                      • Provide financial comfort to women
                      • Inspire Insights

                          • Trend: Universal Uncertainty
                            • Implications
                              • Trend: Life after Debt
                                • Implications
                                • Market Size and Forecast

                                  • Key points
                                    • Mass affluent population
                                      • Figure 1: Distribution of U.S. population, August 2008
                                    • All electronic transactions
                                    • Competitive Context

                                      • Key points
                                        • Recent developments
                                          • Delinquencies and charge-offs
                                            • Figure 2: Credit card delinquency and charge-off rates for all commercial banks, seasonally adjusted, Q3 1991-Q3 2008
                                        • Market Drivers

                                          • Key points
                                            • New graduate job market
                                                • Figure 3: Recent college graduate wages, by gender, 2001-07
                                              • The real estate market
                                                • Figure 4: S&P/Case-Shiller home price indices, 1998-2008
                                              • Recent declines in consumer debt and spending
                                                • Figure 5: Consumer debt percent change at annual rate, 2004-08
                                                • Figure 6: Consumer spending, income and savings, percent change from previous month, August-December 2008
                                                • Figure 7: Banks’ willingness to make consumer installment loans as opposed to three months ago, January 2009
                                                • Figure 8: Banks’ credit standards concerning applications for credit cards as opposed to three months ago, January 2009
                                                • Figure 9: Change in terms and conditions for new and existing credit cards as opposed to three months ago, January 2009
                                              • Declining equity values
                                                • Home and equity value declines: a one-two punch on affluents
                                                  • Figure 10: Wealth distribution of mass affluent households, 2005
                                              • Companies and Brands

                                                • Key points
                                                  • Figure 11: Top credit card issuers ranked by “managed” loans basis, year end 2007
                                                • Mass affluent players
                                                  • Charles Schwab
                                                    • HSBC
                                                      • Citibank
                                                        • MasterCard
                                                          • Bank of America
                                                            • Wells Fargo
                                                            • Innovation and Innovators

                                                              • American Express’ mass affluent insights
                                                                • Deferred debit
                                                                • Advertising and Promotion

                                                                  • Notable direct mail campaigns
                                                                    • American Express
                                                                      • Figure 12: American Express direct mail advertisement, 2008
                                                                    • Chase
                                                                      • Figure 13: Chase direct mail advertisement, 2008
                                                                    • Citibank
                                                                      • Figure 14: Citibank direct mail advertisement, 2008
                                                                    • American Express
                                                                      • Figure 15: American Express direct mail advertisement, 2008
                                                                    • Capital One
                                                                      • Figure 16: Capital One direct mail advertisement, 2008
                                                                    • Television advertising
                                                                      • Exclusivity
                                                                        • Figure 17: Visa Black Card television advertisement, 2008
                                                                        • Figure 18: American Express television advertisement, 2008
                                                                        • Figure 19: American Express Platinum Card television advertisement, 2008
                                                                      • Experiential rewards
                                                                        • Figure 20: World MasterCard television advertisement, 2008
                                                                        • Figure 21: MasterCard television advertisement, 2008
                                                                      • Focusing on the local
                                                                        • Figure 22: Chase Sea Miles Visa Card television advertisement, 2008
                                                                    • The Consumer

                                                                      • Key points
                                                                        • Investment decision-making
                                                                          • Figure 23: Investment decision-making, by gender, November 2008
                                                                          • Figure 24: Investment decision-making, by age, November 2008
                                                                          • Figure 25: Investment decision-making, by race/Hispanic origin, November 2008
                                                                        • Credit card usage
                                                                          • Figure 26: Monthly spend level, by gender, November 2008
                                                                          • Figure 27: Monthly spend level, by age, November 2008
                                                                          • Figure 28: Monthly spend level, by income, November 2008
                                                                          • Figure 29: Monthly spend level, by race/Hispanic origin, November 2008
                                                                        • Number of credit cards used
                                                                            • Figure 30: Number of cards used, by gender, November 2008
                                                                            • Figure 31: Number of cards used, by age, November 2008
                                                                            • Figure 32: Number of cards used, by income, November 2008
                                                                            • Figure 33: Number of cards used, by race/Hispanic origin, November 2008
                                                                          • Credit cards’ share of spending
                                                                              • Figure 34: Percent of purchases via credit card, by gender, November 2008
                                                                              • Figure 35: Percent of purchases via credit card, by age, November 2008
                                                                              • Figure 36: Percent of purchases via credit card, by income, November 2008
                                                                              • Figure 37: Percent of purchases via credit card, by race/Hispanic origin, November 2008
                                                                            • Types of credit cards
                                                                                • Figure 38: Card type, by gender, November 2008
                                                                                • Figure 39: Card type, by age, November 2008
                                                                                • Figure 40: Card type, by income, November 2008
                                                                                • Figure 41: Card type, by race/Hispanic origin, November 2008
                                                                              • Payment behavior
                                                                                  • Figure 42: Payment behavior, by gender, November 2008
                                                                                  • Figure 43: Payment behavior, by age, November 2008
                                                                                  • Figure 44: Payment behavior, by income, November 2008
                                                                                  • Figure 45: Payment behavior, by race/Hispanic origin, November 2008
                                                                                • Changes in payment behavior
                                                                                    • Figure 46: Changes in payment behavior, by gender, November 2008
                                                                                    • Figure 47: Changes in payment behavior, by age, November 2008
                                                                                    • Figure 48: Changes in payment behavior, by income, November 2008
                                                                                    • Figure 49: Changes in payment behavior, by race/Hispanic origin, November 2008
                                                                                  • Switching behavior
                                                                                    • Primary cards
                                                                                        • Figure 50: Potential causes for switching, by gender, November 2008
                                                                                        • Figure 51: Potential causes for switching, by age, November 2008
                                                                                        • Figure 52: Potential causes for switching, by income, November 2008
                                                                                        • Figure 53: Potential causes for switching, by race/Hispanic origin, November 2008
                                                                                      • Purchasing behavior
                                                                                          • Figure 54: Credit card use, by gender, November 2008
                                                                                          • Figure 55: Credit card use, by age, November 2008
                                                                                          • Figure 56: Credit card use, by income, November 2008
                                                                                          • Figure 57: Credit card use, by race/Hispanic origin, November 2008
                                                                                        • Attitudes towards credit card debt and the economy
                                                                                            • Figure 58: Attitudes towards credit cards, by gender, November 2008
                                                                                            • Figure 59: Attitudes towards credit cards, by age, November 2008
                                                                                            • Figure 60: Attitudes towards credit cards, by income, November 2008
                                                                                            • Figure 61: Attitudes towards credit cards, by race/Hispanic origin, November 2008
                                                                                            • Figure 62: Attitudes towards the economy, by gender, November 2008
                                                                                            • Figure 63: Attitudes towards the economy, by age, November 2008
                                                                                            • Figure 64: Attitudes towards the economy, by income, November 2008
                                                                                            • Figure 65: Attitudes towards the economy, by race/Hispanic origin, November 2008
                                                                                        • Cluster Analysis

                                                                                            • Big-spending soloists
                                                                                              • Opportunities
                                                                                                • Big spending transactors
                                                                                                  • Opportunities
                                                                                                    • Single card collaborators
                                                                                                      • Opportunities
                                                                                                        • Figure 66: Mass affluent credit card owner clusters, November 2008
                                                                                                        • Figure 67: Investment decision-making, by mass affluent credit card owner clusters, November 2008
                                                                                                        • Figure 68: Monthly spend level, by mass affluent credit card owner clusters, November 2008
                                                                                                        • Figure 69: Number of cards used, by mass affluent credit card owner clusters, November 2008
                                                                                                        • Figure 70: Percent of purchases via credit card, by mass affluent credit card owner clusters, November 2008
                                                                                                        • Figure 71: Card type, by mass affluent credit card owner clusters, November 2008
                                                                                                        • Figure 72: Card payment behavior, by mass affluent credit card owner clusters, November 2008
                                                                                                        • Figure 73: Change in credit card payment behavior, by mass affluent credit card owner clusters, November 2008
                                                                                                        • Figure 74: Switching preferences, by mass affluent credit card owner clusters, November 2008
                                                                                                        • Figure 75: Card usage categories, by mass affluent credit card owner clusters, November 2008
                                                                                                        • Figure 76: Agreement with statements about credit cards, by mass affluent credit card owner clusters, November 2008
                                                                                                        • Figure 77: Agreement with statements about the economy, by mass affluent credit card owner clusters, November 2008
                                                                                                        • Figure 78: Mass affluent credit card owner clusters, by gender, November 2008
                                                                                                        • Figure 79: Mass affluent credit card owner clusters, by age, November 2008
                                                                                                        • Figure 80: Mass affluent credit card owner clusters, by income, November 2008
                                                                                                        • Figure 81: Mass affluent credit card owner clusters, by race, November 2008
                                                                                                        • Figure 82: Mass affluent credit card owner clusters, by Hispanic origin, November 2008
                                                                                                    • Appendix: The Millennial Affluent—A Closer Look

                                                                                                        • Figure 83: Number of general-purpose credit cards used in the last 60 days, by gender/age and ethnicity/age, November 2008
                                                                                                        • Figure 84: Percent of total purchases for which credit card is used, by gender/age and ethnicity/age, November 2008
                                                                                                        • Figure 85: Card payment behavior, by gender/age and ethnicity/age, November 2008
                                                                                                        • Figure 86: Change in credit card payment behavior, by gender/age and ethnicity/age, November 2008
                                                                                                        • Figure 87: Switching preferences, by gender/age and ethnicity/age, November 2008
                                                                                                        • Figure 88: Card usage categories, by gender/age and ethnicity/age, November 2008
                                                                                                        • Figure 89: Agreement with statements about credit cards, by gender/age and ethnicity/age, November 2008
                                                                                                        • Figure 90: Agreement with statements about the economy, by gender/age and ethnicity/age, November 2008
                                                                                                    • Appendix: Trade Associations

                                                                                                      Companies Covered

                                                                                                      • America's Community Bankers
                                                                                                      • America's Community Bankers (ACB)
                                                                                                      • American Bakers Association (ABA)
                                                                                                      • American Express Travel Related Services Company Inc
                                                                                                      • Bank of America Corporation
                                                                                                      • BITS
                                                                                                      • Bureau of Economic Analysis
                                                                                                      • Capital One Financial Corporation
                                                                                                      • Charles Schwab Corporation
                                                                                                      • Citibank
                                                                                                      • Citigroup Inc.
                                                                                                      • Consumer Bankers Association
                                                                                                      • Economic Policy Institute
                                                                                                      • Employee Benefit Research Institute
                                                                                                      • Greenfield Online
                                                                                                      • Grupo Santander Central Hispano S.A.
                                                                                                      • HSBC North America Holdings Inc.
                                                                                                      • Independent Community Bankers of America
                                                                                                      • JPMorgan Chase & Co
                                                                                                      • MasterCard Incorporated
                                                                                                      • Merrill Lynch & Co. Inc
                                                                                                      • Morgan Stanley
                                                                                                      • The American Bankers Association
                                                                                                      • The American Financial Services Association
                                                                                                      • The Financial Services Roundtable
                                                                                                      • Visa U.S.A. Inc.
                                                                                                      • Wachovia Corporation
                                                                                                      • Washington Mutual Inc
                                                                                                      • Wells Fargo & Company

                                                                                                      Mass Affluent and Credit Cards - US - February 2009

                                                                                                      US $3,995.00 (Excl.Tax)