Despite rising concern surrounding credit card debt and the stress that it causes, a surprising 45% of cardholders are willing to pay higher annual fees for superior rewards and benefits, highlighting a shift towards premium offerings. Concurrent with this demand for enhanced benefits is a focus on credit building, solidifying the notion that expansion of the credit card market is occurring at the extremes.

As the industry stabilizes following a two-year period of extreme growth, issuers must contend with rising delinquency rates that pose a significant threat. Gen Z and Black consumers that were powering the expansion of the card market had severely reduced acquisition rates this year, demonstrating the uneven effects of credit tightening.

This landscape presents a dual opportunity: capitalizing on consumer interest in high-value credit products while addressing the challenges of maintaining financial health amid increasing delinquencies. As credit cards shift from a purely physical product to a multifaceted experience that is highly digital, issuers must ensure that their digital platforms keep cardholders engaged and invested in their rewards ecosystems.

This report looks at the following areas:

  • Rewards earned on credit cards
  • Most common rewards redemptions
  • Reasons not to own a credit card
  • Timing of most recent credit card acquisition
  • Motivations behind most recent credit card acquisition
  • Attitudes toward co-branded credit cards
  • Attitudes toward credit cards

Credit card acquisition is decelerating as delinquencies grow, shifting focus to the extremes of the credit spectrum.

Patrick Rahlfs, Principal Analyst – Financial Services

Market Definitions

For the purposes of this Report, Mintel has used the following definitions: This Report examines consumer attitudes and behaviors concerning credit cards, including credit card ownership rates, rewards style and redemption preferences, and motivations behind signing up for a new credit card.

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  1. Executive Summary

    • What you need to know
    • Gen Z card acquisition is rapidly decelerating
    • Graph 1: timing of most recent credit card opening, by generation and year, 2022-24
    • Credit score considerations are the top motivation for new card sign-ups
    • Graph 2: credit card sign-up motivations, 2024
    • Consumer openness to annual fees continues to grow
    • Graph 3: attitudes toward annual fees, by year, 2022-24
    • Market predictions
    • Opportunities
    • Monthly fees combine urge for luxury with approachable structure
    • Co-branded cards can improve everyday rewards for engaged cardholders
  2. Market Dynamics

    • Market context
    • Market size and drivers
    • Credit card account growth is strong, but decelerating
    • Graph 4: number of credit card accounts, by year, 2016-24
    • Card balances remain elevated
    • Graph 5: Y/Y change in credit card debt balance, 2016-24
    • Delinquency rates reach new highs
    • Graph 6: credit card delinquencies, 2016-24
    • Disposable income rises, but remains tight
    • Graph 7: change in Disposable Personal Income, 2022-24
  3. Consumer Insights

    • Consumer fast facts
    • Rewards Earn
    • Cash rewards are the standard
    • Graph 8: rewards earn from primary credit cards, 2024
    • Men gravitate toward co-branded rewards, while women prefer cash/points
    • Graph 9: credit card rewards earn, by gender, 2024
    • Flexible points have additional appeal to younger cardholders
    • Graph 10: credit card rewards earn, by generation, 2024
    • Millennials look for travel rewards through co-branded cards
    • Graph 11: co-branded credit card rewards earn, by generation, 2024
    • Financially healthy consumers often graduate beyond cash rewards
    • Graph 12: credit card rewards earn, by financial situation, 2024
    • Rewards redemption
    • Cash redemption is most common
    • Graph 13: credit card rewards redemption, 2024
    • Younger cardholders seek a variety of redemption options
    • Graph 14: credit card rewards redemption, by generation, 2024
    • Rewards points succeed in flexible redemption, but cash still reigns supreme
    • Graph 15: credit card rewards redemption, by credit card rewards earn, 2024
    • Airline rewards are most often converted to travel redemption
    • Graph 16: credit card rewards redemption, by co-brand rewards earn, 2024
    • Black cardholders are top users of gift card redemption
    • Graph 17: credit card rewards redemption, by race, 2024
    • Struggling consumers often lack rewards cards
    • Graph 18: lack of credit card redemption, by financial situation, 2024
    • Reasons not to have a credit card
    • Comfort with debit is a stronger barrier than aversion to debt
    • Graph 19: reasons not to own a credit card, 2024
    • Rising prices have caused more consumers to find use cases for credit cards
    • Graph 20: reasons not to own a credit card, by year, 2023-24
    • Women are more likely to struggle with credit card qualification
    • Graph 21: reasons not to own a credit card, by gender, 2024
    • Consumers become more open to debt in their mid-to-late 20s
    • Graph 22: reasons not to own a credit card, by age, 2024
    • Hispanic consumers trust issuers, but may struggle with qualification
    • Graph 23: reasons not to own a credit card, by race, 2024
    • Timing of most recent credit card
    • About one in three cardholders opened a new card in the past year
    • Graph 24: timing of most recent credit card opening, 2024
    • Credit card openings are decelerating
    • Graph 25: timing of most recent credit card opening, by year, 2021-24
    • Gen Z credit card acquisition slipped below Millennials
    • Graph 26: credit card opening in the past year, by generation and year, 2022-24
    • Black consumers severely decelerated card acquisition
    • Graph 27: opened a credit card in the past year, by race and year, 2022-24
    • Card acquisition is occurring at the extremes
    • New credit card motivations
    • Credit building is the most common #1 motivation
    • Graph 28: credit card sign-up motivations, 2024
    • Credit building is far and away the top motivation for female cardholders
    • Graph 29: #1 ranked new credit card motivation, by gender, 2024
    • Young cardholders seek bonuses and benefits…
    • Graph 30: top-three ranked credit card acquisition motivation, by age, 2024
    • …while 35-44 year-olds seek to manage balances
    • Graph 31: top-three ranked credit card acquisition motivation, by age, 2024
    • Interest rate shopping peaks in $75K – $100K income segment
    • Graph 32: top-three ranked credit card acquisition motivation, by household income, 2024
    • Asian cardholders are highly motivated by rewards and bonuses
    • Graph 33: top-three ranked credit card acquisition motivation, by race, 2024
    • Co-branded credit cards
    • Co-branded cards are often complementary products
    • Graph 34: branded vs co-branded card ownership, 2024
    • Co-branded cardholders often use their co-brand cards for general purchases
    • Graph 35: attitudes toward co-branded credit cards, 2024
    • Millennials have the highest preference toward co-branded rewards
    • Graph 36: attitudes toward co-branded credit cards, by generation, 2024
    • Young co-branded cardholders are often converted in-person
    • Graph 37: in-person application for co-branded card, by age, 2024
    • Hotel cards are the most popular for everyday purchases
    • Graph 38: co-branded card behaviors, by co-branded rewards earn, 2024
    • Elevated loyalty status is often tied in with travel co-branded cards
    • Graph 39: elevated loyalty status through co-branded card, by co-branded rewards earn, 2024
    • Attitudes toward credit cards
    • Inflation has not dampened enthusiasm for premium cards
    • Graph 40: attitudes toward annual fees, by year, 2022-24
    • Premium card ownership shifts further toward Gen Z & Millennials
    • Graph 41: consumers who pay an annual fee for at least one of their credit cards, by generation and year, 2023-24
    • Waning inflation rates have yet to ease credit card stress
    • Graph 42: attitudes toward credit card debt, by year, 2023-24
    • Younger generations' card experience is digital first
    • Graph 43: usage of mobile apps and wallets, by generation, 2024
    • Despite digital card usage, card appearance is increasingly crucial
    • Graph 44: importance of physical card appearance, by year, 2022-24
    • Despite digital card usage, card appearance is increasingly crucial
    • Young consumers are immediately willing to explore new issuers
    • Graph 45: card ownership outside of primary bank, by generation, 2024
    • Card consolidation is a common preference
    • Graph 46: consumers who would prefer to own fewer credit cards, by number of credit cards regularly used, 2024
  4. Innovation and Marketing strategies

    • Launch activity and innovation
    • Wells Fargo Attune promotes new rewards categories centered on wellness
    • American Express touts limited time card art for its Gold refresh
    • US Bank announces a supercharged cash back card
    • Marketing and advertising
    • Non-rewards offers are more competitive than ever
    • Graph 47: non-rewards average offer score and subscores, 2023-24
    • American Express Platinum television ads showcase lifestyle benefits
    • Chime ties credit score to life goals
    • Luxury Gold Card showcases 24K gold composition
    • Annual fee cards are capturing a larger portion of mail volume
    • Graph 48: percentage of credit card mail volume, by annual fee, 2022-24
  5. Appendix

    • Market definition
    • Consumer research questions
    • Consumer research methodology
    • Generations
    • Abbreviations and terms

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