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UK Credit Cards market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Credit Cards market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Definition

The purpose of this Report is to provide insight into the attitudes and behaviors of consumers toward credit cards. How consumers use their cards and what they are seeking from issuers in terms of security are also covered.

What you need to know

The credit card industry is a mature one and competition for new customers is fierce. Issuers have to find ways to make their card stand out from the others or risk moving down from the top of their customers’ wallets. Since growth will come primarily from young people, issuers have to find ways to appeal to this group – a difficult task since many are wary of taking on debt. Flexible incentives and embedded money management tools might help smooth the way.

Expert analysis from a specialist in the field

Written by Jennifer White Boehm, a leading analyst in the Financial Services sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The credit card industry is a mature one and competition for new customers is fierce. Issuers have to find ways to make their card stand out from the others or risk moving down from the top of their customers’ wallets. Since growth will come primarily from young people, issuers have to find ways to appeal to this group – a difficult task since many are wary of taking on debt. Flexible incentives and embedded money management tools might help smooth the way. Jennifer White Boehm
Associate Director - Financial Services

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • The issues
            • Outstanding credit crosses the $1 trillion mark
              • Figure 1: Revolving consumer credit outstanding, at current prices, 2013-Q1 2018
            • Young people don’t like credit cards
              • Figure 2: Attitudes toward credit cards, by generation, May 2018
            • Trust is still an issue
              • Figure 3: Attitudes toward credit cards, May 2018
            • The opportunities
              • Younger people are becoming more comfortable with debt
                • Figure 4: Percentage of consumers with credit card debt, by age, June 2012-June 2017
              • Use rewards to attract young consumers
                • Figure 5: Motivations to apply, by age, May 2018
              • Integrate money management into card usage
                • Figure 6: Attitudes toward credit cards, May 2018
              • Target young cardholders to switch to mobile wallets
                • Figure 7: Credit card behavior, by age, May 2018
              • What it means
              • The Market – What You Need to Know

                • Debt totals continue to grow
                  • The number of credit card accounts is up
                    • Most people have credit card debt
                      • Direct mail acquisition volume is trending down
                        • Alternative payment options affect card use
                        • Market Size

                          • Total outstanding revolving debt tops $1 trillion
                            • Figure 8: Revolving consumer credit outstanding, 2013-Q1 2018
                          • Growth in number of credit card accounts
                            • Figure 9: Number of credit card accounts, Q4 2012-Q4 2017
                          • Most Americans have credit card debt
                            • Figure 10: Percentage of consumers who have credit card debt, June 2012-June 2017
                            • Figure 11: Percentage of consumers with credit card debt, by age, June 2012-June 2017
                        • Market Perspective

                          • Direct mail acquisition volume is trending down
                            • Alternative payment options affect card use
                            • Market Factors

                              • Unemployment
                                • Figure 12: Unemployment rate, April 2013-April 2018
                              • Federal funds rate continues to increase
                                • Figure 13: Federal Funds rate, April 2017-March 2018
                              • Consumers are optimistic about their financial situation
                              • Key Players – What You Need to Know

                                • Contactless cards are growing in popularity
                                  • Uber targets Millennials
                                    • Chip cards are helping reduce in-store fraud, but increase online fraud
                                      • Moving cardholders to mobile wallets
                                        • Virtual credit cards
                                          • Biometric credit cards
                                            • Cryptocurrency rewards
                                            • What’s Working?

                                              • Contactless cards are growing in popularity
                                                • Uber targets Millennials
                                                • What’s Struggling?

                                                  • Chip cards are helping reduce in-store fraud, but increase online fraud
                                                    • Figure 14: Online shopping frequency, by generation, March 2018
                                                  • Moving cardholders to mobile wallets
                                                  • What’s Next?

                                                    • Virtual credit cards
                                                      • Biometric credit cards
                                                        • Cryptocurrency rewards?
                                                        • The Consumer – What You Need to Know

                                                          • Only half of young men have a credit card
                                                            • Retail cards are favored by female cardholders aged 45+
                                                              • Most have little or no credit card debt
                                                                • Qualifying is not the issue
                                                                  • Many use cards to pay bills
                                                                    • Most think cards are useful, but are wary of security
                                                                      • Hispanics are warier of credit
                                                                      • Credit Card Ownership

                                                                        • Only half of young men have a credit card
                                                                          • Figure 15: Credit card ownership, by gender and age, May 2018
                                                                        • Hispanics have fewer financial products, including credit cards
                                                                          • Figure 16: Financial product ownership, by Hispanic origin, May 2018
                                                                        • Retail cards are favored by female cardholders aged 45+
                                                                          • Figure 17: Type of card owned, by gender and age, May 2018
                                                                        • Age more of a factor in general purpose card ownership
                                                                          • Figure 18: Type of card owned, by age, May 2018
                                                                      • How Much Do Cardholders Owe?

                                                                        • Most have little or no credit card debt
                                                                          • Figure 19: Amount of credit card debt, by number of cards owned, May 2018
                                                                        • More than half with highest credit score have no credit card debt
                                                                          • Figure 20: Amount of credit card debt, by credit score, May 2018
                                                                      • Why No Credit Cards?

                                                                        • Qualifying is not the issue
                                                                          • Figure 21: Reasons for not having a credit card, May 2018
                                                                        • Young people are more responsive to rewards
                                                                          • Figure 22: Motivations to apply, by age, May 2018
                                                                      • TURF Analysis

                                                                        • Methodology
                                                                          • It isn’t easy to encourage card ownership
                                                                            • Figure 23: TURF analysis – Motivations to apply, May 2018
                                                                        • Credit Card Behavior

                                                                          • Many use cards to pay bills
                                                                            • Figure 24: Credit card behavior, May 2018
                                                                            • Figure 25: Discover email, November 2017
                                                                            • Figure 26: American Express email, December 2016
                                                                          • Mobile wallets are much more popular among young cardholders
                                                                            • Figure 27: Credit card behavior, by age, May 2018
                                                                          • Behaviors differ according to credit score
                                                                            • Figure 28: Credit card behavior, by credit score, May 2018
                                                                        • Attitudes toward Credit Cards

                                                                          • Most think cards are useful, but are wary of security
                                                                            • Figure 29: Attitudes toward credit cards, May 2018
                                                                            • Figure 30: Citibank email, May 2018
                                                                          • Young people prefer debit to credit
                                                                            • Figure 31: Attitudes toward credit cards, by generation, May 2018
                                                                            • Figure 32: Fifth Third credit card direct mail, February 2018
                                                                          • Hispanics are warier of credit
                                                                            • Figure 33: Attitudes toward credit cards, by Hispanic origin, May 2018
                                                                          • Trust is still an issue
                                                                            • Figure 34: Attitudes toward credit cards, all, May 2018
                                                                          • Income affects attitudes toward cards
                                                                            • Figure 35: Attitudes toward credit cards, by household income, May 2018
                                                                        • CHAID Analysis

                                                                          • Young men are most receptive to storing credit card information
                                                                            • Figure 36: Attitudes toward credit cards – CHAID – May 2018
                                                                          • Methodology
                                                                            • Figure 37: Attitude towards cards – CHAID – Table output, May 2018
                                                                        • Cluster Analysis

                                                                            • Figure 38: Credit card clusters, May 2018
                                                                          • Cluster 1: Credit Averse
                                                                            • Cluster 2: Credit Cautious
                                                                              • Cluster 3: Credit Lovers
                                                                                  • Figure 39: Chase Sapphire Reserve email, October 2017
                                                                              • Appendix – Data Sources and Abbreviations

                                                                                • Data sources
                                                                                  • Sales data
                                                                                    • Consumer survey data
                                                                                      • Direct marketing creative