Canada Credit Cards Market Report 2022
£ 3,695 (Excl.Tax)
Description
The Canada Credit Cards Market Report 2022 identifies consumers’ attitudes towards credit card usage, new Canadians and credit cards, and the impact of increasing online channels on the credit card industry in Canada. This report covers the Canadian credit card market size, market forecast, market segmentation and industry trends for the Canadian credit card market.
Current Market Landscape
Our Canadian credit card market research has identified that the vast majority of Canadians own a credit card – one of the highest card ownership rates in the world. Credit cards are the most popular method of payment, particularly for online purchases. Canadians are highly motivated by the relatively generous rewards credit cards offer. In addition, consumer perceptions favour credit cards in areas such as perceived costs, convenience, and security. The marketplace is extremely competitive and is dominated by the major banks, but smaller card companies and Fintech challengers offer multiple options to consumers.
Moreover, credit card spending is rebounding after falling sharply in 2020-21, as the pandemic curtailed many entertainment and spending options. But spending is still significantly below pre-pandemic levels. Rewards, security, almost universal acceptance, and ease of use for online shopping continues to drive the popularity of credit cards.
Credit Card Statistics in Canada: Market Share and Key Industry Trends
Our Canadian credit card market report has identified new Canadians as a growth market and they will continue to use credit cards, including secured cards, to build a credit history in Canada. Credit card companies will be pressured to promote financial literacy and promote responsible credit card usage. Rewards will evolve as new categories emerge, e.g. crypto and NFT rewards. Travel rewards start making a comeback as travel bounces back. However, cash back remains most popular due to its simple structure.
- 90% of Canadians own a credit card.
- 69% of Canadians prefer credit cards as their method of payment.
- 25% spend more than $3,000 on their credit card.
- 49% make use of the app of their credit card company.
Future Trends in the Canadian Credit Card Market
The use of debit cards for online shopping will increase, challenging the primacy of credit cards. We anticipate an increase in number of digital credit cards as more consumers adopt mobile payments. Moreover, pushback against high interchange fees charged to merchants, will continue.
However, amid concerns about high inflation, some Canadians will find credit card rewards useful in helping to ease inflation woes. There is also a strong demand for innovation as two in three consumers demand more imagination in terms of rewards from credit card companies.
Read on to discover more details or take a look at all of our Debit and Credit Cards Market Research.
Quickly Understand
- Consumer behaviours and attitudes related to credit cards.
- Credit card ownership and behaviours.
- Channels for card acquisition.
- Factors that influence usage of card, usage habits and attitudes towards credit cards.
- Credit card ownership: How many Canadians own/use credit cards and why?
- Credit cards and the online retail channel.
- Credit card rewards.
Covered in this Report
Brands: Apple, Credit Kudos, Afterpay, Affirm, Klarna, PayPal, Zip, Empire Company Ltd. Scotiabank, Cineplex, and many more.
Expert Analysis from a Specialist in the Field
This report, written by Sanjay Sharma, a leading analyst in the Financial Services sector, delivers in-depth commentary and analysis to highlight current trends in the Canadian credit card market, and adds expert context to the numbers.
Credit card spending is making a recovery after falling to pandemic-inspired lows. The generous rewards offered by credit card companies are a major motivation for regular credit card use while prepaid and secured cards remain important gateway products. Bank branches are an important distribution channel though online methods of purchase are also significant.
Sanjay Sharma
Senior Financial Services Analyst
Table of Contents
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Overview
- What you need to know
- Definitions
- Key issues covered in this Report
- What you need to know
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Executive Summary
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- Top takeaways
- Market overview
- Outlook on credit cards
- Figure 1: Credit cards outlook, 2022-27
- Opportunities
- Bank branches remain the most important acquisition channel overall
- Two in five 18-54s interested in a Fintech credit card
- Strong demand for more innovation in rewards
- Challenges
- The role of banks in promoting financial wellness
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Market Perspective
- Inflation will make consumers value rewards more
- Figure 2: Changes in Consumer Price Index, 2019-22
- Overall consumer spending trends
- Credit card spending still significantly below pre-pandemic levels
- New Canadians are a major growth market for credit card issuers
- Figure 3: Distribution of foreign-born population, by region of birth, 1996-2036 (projected)
- Inflation will make consumers value rewards more
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Competitive Strategies
- BNPL news
- Apple creates its own Financing company to support new BNPL offering
- US Regulator warns against Big Tech entry into BNPL
- Rewards programs
- Empire becomes co-owner of Scene+
- Star Alliance plans credit card for redeeming points across 26 airlines
- BNPL news
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Marketing Campaigns
- Amex puts members ‘front and centre’ of in-person experiences
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- Figure 4: Always a story to tell: 60, June 2022
- A campaign introducing “True Name” shows how a simple card can bring a lot of joy
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- Figure 5: True Name by MasterCard, April 2022
- Amex puts members ‘front and centre’ of in-person experiences
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Credit Cards – Fast Facts
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Credit Card Ownership
- Most Canadians have a credit card
- Figure 6: Credit card ownership, 2022
- Regular card ownership spikes among over-35s
- Figure 7: Credit card ownership, by age, 2022
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- Figure 8: KOHO Prepaid Facebook ad, May 2022
- Income and ethnic differences in card ownership
- New Canadians are a natural market for prepaid and secured cards
- Figure 9: Credit card ownership, by tenure in Canada, 2022
- The prepaid and secured card market opportunity
- Most Canadians have a credit card
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Reasons for Obtaining Primary Card
- Rewards/perks are the top reason for obtaining primary card
- Figure 10: Reasons for obtaining primary credit card, 2022
- Building credit is the main motivation for 18-34s while perks/rewards matter more to over-35s
- Figure 11: Reasons for obtaining primary credit card, by age, 2022
- Paying bills is a reason for a third of 18-54s
- Financing large purchases is a motivation for a fifth of consumers
- Figure 12: Scotia SelectPay: Credit Card Instalments Feature (TC): 60, December 2021
- Rewards/perks are the top reason for obtaining primary card
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Choice Factors
- More than half choose a primary card with no annual fee
- Figure 13: Factors influencing choice of primary card, 2022
- Rewards are a major appeal
- Figure 14: PC Financial MasterCard Facebook ad, July 2022
- No annual fee matters more to over-55s; many other factors influence 18-34s more
- Figure 15: Factors influencing choice of primary card (select), by age, 2022
- Higher credit limit and free gift/services matter more to 18-34s
- Low APR and balance transfer rates influence 18-54s more
- Figure 16: BMO Preferred rate MasterCard, July 2022
- Figure 17: MBNA True Line credit card, August 2022
- More than half choose a primary card with no annual fee
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Acquisition Channels
- In-person channels are still the most important distribution method
- Figure 18: Credit card acquisition channels, 2022
- Bank branches remain the most important acquisition channel overall
- Branch relationships facilitate credit card sales
- Figure 19: Regular credit card acquisition channels, 2022
- Retail locations are used by one in eight consumers
- Other public locations used by one in 20 consumers
- Online is a close second to in-person overall and equally important to in-person for prepaid cards
- Credit card company websites are used by two in five card holders overall
- Figure 20: Prepaid credit card acquisition channels, 2022
- Around one in seven use a credit card comparison site or app
- Some one in 20 apply through social media platforms
- Phone calls more used for prepaid and secured cards
- Figure 21: Secured credit card acquisition channels, 2022
- In-person channels are still the most important distribution method
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Rewards Preferences and Attitudes
- Strong demand for more innovation in rewards
- Figure 22: Rewards attitudes and preferences, 2022
- Two thirds of consumers are less attracted to travel cards due to fees…
- Figure 23: TD Aeroplan Visa Card Facebook ad, July 2022
- …while close to a similar number prefer cashback rewards
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- Figure 24: BMO CashBack Card Facebook ad, May 2022
- Mixed opinions on the value of rewards
- Figure 25: Attitudes towards credit card rewards, 2022
- Strong demand for more innovation in rewards
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Digital Attitudes
- Most prefer physical cards over digital
- Figure 26: “I prefer using a physical card to a digital version” (% agree), by age, 2022
- Three in four 18-34s use the app of their credit card company
- Figure 27: “I use the app of my credit card company” (% agree), by age, 2022
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- Figure 28: “My credit card is part of my digital wallet” (% agree), by age, 2022
- Two in five 18-54s interested in a Fintech credit card
- Figure 29: “I am open to applying for a credit card issued by a Fintech company” (% agree), by age and gender, 2022
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- Figure 30: Neo Financial credit card Facebook ad, March 2022
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- Figure 31: Brim Financial Instagram post, November 2021
- Social media discussion on credit cards is strongly age-dependent
- Figure 32: “I discuss credit cards on social media” (% agree), by age, 2022
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- Figure 33: “I have applied for a credit card through an app in the past” (% agree), by age, 2022
- Most prefer physical cards over digital
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General Attitudes towards Credit Cards
- Rewards are a major driver of credit card usage
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- Figure 34: General attitudes towards personal finances, 2022
- Young men most likely to use personal finance sites to get free credit scores
- Figure 35: “I have used a personal finance site that offers free credit scores” (% agree), by age and gender, 2022
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- Figure 36: Borrowell desktop display, April 2022
- A quarter of credit card users are high-value spenders
- Figure 37: ”My monthly credit card bills typically exceed $3,000” (% agree), by age, 2022
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- Figure 38: American Express ad, August 2022
- Figure 39: Premium credit card landscape in Canada, 2022
- Three in 10 are influenced to apply by advertisements
- Figure 40: “Advertisements have influenced me to apply for a credit card in the past” (% agree), by age and gender, 2022
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- Figure 41: Neo Financial credit card Facebook ad, July 2022
- Figure 42: American Express Facebook ad, July 2022
- One in four have done a balance transfer in the past year
- Figure 43: “I have done a balance transfer on my credit card in the past year” (% agree), by age, 2022
- Switching behaviour declines with age
- Figure 44: General credit card attitudes (% agree), by age, 2022
- Half of men aged 18-34 have withdrawn cash using credit card
- Half prefer paying with cash/debit to retain spending control
- Rewards are a major driver of credit card usage
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Improving the Credit Card Experience
- Reward maximization information is the top ask of consumers
- Figure 45: Improving the credit card experience, 2022
- Younger consumers more enthusiastic about improvements
- Figure 46: Improving the credit card experience, by age, 2022
- One in five 18-34s would like more investment in community initiatives
- Figure 47: Bounce back stronger with Desjardins, September 2021
- Two in five new Canadians are looking for education on financial literacy
- Figure 48: Improving the credit card experience, by tenure in Canada, 2022
- The role of banks and credit card companies in promoting financial wellness
- Reward maximization information is the top ask of consumers
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Appendix – Data Sources and Abbreviations
- Data sources
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
- Data sources
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