Deals Spur Credit Card Usage

March 25, 2010

The average American uses two credit cards regularly, and will select which cards to use based on specific deals, according to research from compete.

Americans Hold 4 Credit Cards, Use 2
The average American holds 4.4 credit cards. However, they regularly use 1.9 of those cards, rarely use 1.6, and never use one.

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Specific Deals Biggest Influence on Card Choice
While a variety of reasons influence Americans’ decisions on which credit cards to use, specific deals such as double points for purchased made at certain merchants are the leading reason, influencing 36% of cardholders. Another 29% of cardholders use one primary credit card and will use another if their primary is not functioning or does not get accepted.

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Interestingly, 18% of cardholders have no particular reason for favoring one credit card as compared to another. Ten percent will dedicate a specific card to a specific type of purchase (such as grocery), and 5% have other reasons for favoring certain card(s). Only 2% will use one card for personal purchases and another for business purchases.

In addition, compete research found that the longer a cardholder has a particular card, the greater the odds they will use it.

Habit, Rewards Determine Card Usage
The two primary factors influencing card usage are habit and rewards. Thus compete advises credit card issuers to provide incentives for tenured cardholders. This will encourage loyalty and frequency of use among cardholders, reinforcing card usage and helping to ensure those cards are among the ones used on a regular basis.

Credit Card Usage Remains Low
Although Census Bureau estimates indicate 181 million Americans will own credit cards this year, their usage rate remains low, according to other recent research from compete. Almost half of credit card owners only use them an average of three times a month or less. compete data indicates that 19% of credit card owners use them less than once a month, and another 28% use them one to three times a month. However, the largest single bloc of credit card owners (37%) uses them one to six times a week, and another 16% use credit cards seven or more times a week.

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