Income Analysis of Consumer Payment Methods & Rewards vs. Non-Rewards Credit Cards Phoenix Marketing International (PMI) Financial Services Division July.

Income Analysis of Consumer Payment Methods & Rewards vs. Non-Rewards Credit Cards

Phoenix Marketing International (PMI)Financial Services Division

July 2012

Greg [email protected](828) 697-9191

Contact Information:

Copyright © Phoenix Marketing International 2012. All Rights Reserved.

Chart Excerpts from PMI Research Report:

2

Incidence of Owning a Rewards Card vs. Non-Rewards Card – by Income Group -- 2011


Within each income group, the incidence of owning a rewards card was significantly higher than the incidence of owning a non-rewards card.

Percent of Credit Card Households Owning Rewards vs. Non-Rewards Credit Cards Within Income Group

Chart 1

Source: Phoenix Credit Card Market Tracker, January-December 2011. Total Sample: 18,905 consumer credit cardholders aged 21+ with HHI $20K+.

3

Credit Card Spending Dollars -- 2011

% Spending Dollars on Non-Rewards Accounts% Spending Dollars on Rewards Accounts


Percent of Credit Card Spending Dollars on Rewards vs. Non-Rewards Accounts Within Income Group

Chart 2

Within each income group, share of total credit card spending dollars was far higher on rewards accounts vs. non-rewards accounts.

92% % Card HHs Active on Any Card Owned in an Average Month Within Each Income Group

93% 91%92% 94%92% 96%93% 98%


4

Credit Card Spending Dollars -- 2003

% Spending Dollars on Non-Rewards Accounts% Spending Dollars on Rewards Accounts


Percent of Credit Card Spending Dollars on Rewards vs. Non-Rewards Accounts Within Income Group

Chart 2a

In 2003, the share of total credit card spending dollars far higher on rewards accounts than non-rewards accounts only at higher income levels.


5

Credit Card Revolving Balance Dollars

% Revolving Balance Dollars on Non-Rewards Accounts% Revolving Balance Dollars on Rewards Accounts


Percent of Credit Card Revolving Balance Dollars on Rewards vs. Non-Rewards Accounts Within Income Group

Chart 3

Within each income group, share of balances was higher on rewards accounts vs. non-rewards accounts – particularly among upper-income

credit card-owning households.

65% % Card HHs Revolving a Balance on Any Card Owned in an Average

Month Within Each Income Group

58% 62%65% 60%61% 48%56% 43%


6

Credit Card Revolving Balance Dollars -- 2003

% Revolving Balance Dollars on Non-Rewards Accounts% Revolving Balance Dollars on Rewards Accounts


Percent of Credit Card Revolving Balance Dollars on Rewards vs. Non-Rewards Accounts Within Income Group

Chart 3a

In 2003, the balance share profile was reversed – with a higher percentage of revolving balances carried on non-rewards cards than

rewards cards.

59% % Card HHs Revolving a Balance on Any Card Owned in an Average

Month Within Each Income Group

56% 60%61% 59%58% 50%54% 38%


7

Credit Card Annual Fee Dollars -- 2011

% Annual Fee Dollars Paid on Non-Rewards Accounts% Annual Fee Dollars Paid on Rewards Accounts


Percent of Credit Annual Fees Paid on Rewards vs. Non-Rewards Accounts Within Income Group

Chart 4

Within each income group, share of annual fee dollars was higher on rewards accounts vs. non-rewards accounts – particularly among upper-

income credit card-owning households.

32% % Card HHs Paying an Annual Fee on Any Card

Owned in an Average Month Within Each

Income Group

34% 29%30% 32%31% 40%32% 55%


8

Credit Card Revenue Value* -- 2011

% Revenue Dollars Value on Non-Rewards Accounts% Revenue Dollar Value on Rewards Accounts


Percent of Revenue Value on Rewards vs. Non-Rewards Accounts Within Income Group

Chart 5

Within each income group, share of revenue value *was higher on rewards accounts vs. non-rewards accounts – particularly among upper-

income credit card-owning households.

* Revenue value figures were derived from cardholder reported data on spending, revolving balances, account APR and annual fees. A revenue value model was created to identify proxies for interchange, finance charge s and annual fee value.


Income Analysis of Consumer Payment Methods & Rewards vs. Non-Rewards Credit Cards Phoenix Marketing International (PMI) Financial Services Division July.

Documents

nonrewards card

nonrewards accounts

upperincome credit card

consumer credit cardholders

income group chart

card hhs active

higher income levels

total sample