Customers Buy More On Their First Credit Cards
Written on June 25, 2010 – 10:33 pm | by Nicole Gutierrez
The first credit card that the consumers opt for is generally the one with the highest outstanding amount since they tend to use it most often as compared to the others. This can be perceived to be one of the reasons for most banks and financial institutions issuing credit cards to make the first move to lure youngsters and those fresh out of college to apply for the credit cards offered by them.
One of the recently conducted survey outlines that the card holders are most loyal to the first bank that offer them the card. It is this brand loyalty that helps the banks make more profits since they tend to use this card for most of their purchases. Most often than not, as these young people grow older and would like to avail mortgage, home loans or auto loans, they tend to approach the same bank that issued them their first credit card.
Based on the spending patterns studied in the month of April, close to 40% of the people had their highest outstanding on their first card and around 31% had the highest dues on their second card. card holders who did not use their cards to make purchases in the month of April were not considered to be a part of this survey. Also, people who had credit cards that offered a credit limit of $500 or below were not included in the survey.
On an average, every person has at least three credit cards from different banks of which two of them are used very frequently. The findings of the survey that were published do not carry the details the banks from which the consumers obtained their cards. The number of customers who had balances on the third credit card they had obtained was 50% lesser than the number of people with outstanding balances on their second account. The number began to fall with every consecutive card obtained thereon.
Under the men’s category, most of the loyal consumers were young people in the age group to 21 to 29 or men over 55 years old. Under the women’s category, most of them in the age group of 35 to 39 held credit cards from more than one bank. And surprisingly, it was noticed that the women had cards from multiple banks as compared to the men. The good news though is that despite having multiple cards, such consumers were more likely to pay off their dues on time as compared to those with just one credit card.
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