No Annual Fee, Low Interest Rates Most Desired Features
When asked to rank the five most appealing features a credit card could offer them, with the most appealing receiving a rank of five, consumers overwhelmingly selected no annual fee, which led all possible features with a 3.1 rating. Low interest rates came in a distant second with a 1.9 rating, followed closely by reward points with a 1.7 rating. The top five were rounded out by bonus through use of exclusive shopping site (1.5) and cash back on specific expenses (1.4).
Interestingly though, shoppers seemed to find low interest rates more attractive than rewards. The significance of lower interest rates could be due to the economy and also due to the Credit CARD Act taking effect in February 2010.
Another surprising finding was that shoppers ranked bonus through exclusive online shopping sites higher than other rewards like cash back or airline miles. Compete analysis indicates this could be in response to specific promotions going on during the period or more options being built in to such sites.
Prospective Owners Research Credit Cards Online
Survey results indicate prospective credit card owners do much of their research on possible cards online. Almost half of respondents (42%) use credit card company websites, while 26% use search engines. Another 22% use product comparison websites.
The only two offline resources with comparable popularity among respondents were local bank branch (26%), recommendations from family/friends (25%) and direct mail (19%).
Not all online resources are widely used, however. Online resources such as message boards/blogs (9%), online newspapers/magazines (8%) and online consumer-generated reviews (8%) were among the least popular research options, on- or offline.
Credit Card Customers Apply Online
In addition to going online to research credit cards, consumers also go online to apply for them. Credit card company websites led all application methods with a 36% usage rate, followed by affiliated company websites (29%). Bank branches came in a distant third with 13% usage, and no other application method reached a double-digit usage rate among respondents.
Different Credit Card Features Appeal to Specific Segments
Among existing credit card users, different features appeal to specific customer segments, according to other survey findings from Compete. Credit card owners who find no annual fees most appealing have owned their most frequently used card the longest. Cash back also seems to appeal to more loyal card owners. In comparison, the card holders who found low interest rates most appealing were the least loyal.
In some respects, airline miles may be the feature that provides credit card issuers with the biggest payback, as airline miles are the most preferred feature among both heavy credit card spenders and users.