The report looked at key usage, payment and attitudinal trends of credit card customers, showing that cultural attitudes are the major factors driving credit card consumption and behaviour.
On average, Australians have 2.1 cards each, the lowest in the survey. Malaysians have an average of 3.26 cards, with 84 percent of the population owning three credit cards. Australian consumers ranked high in terms of card usage, using their cards an average of 5.4 times per week. Some 12 percent of Australians use their card 11 or more times per week, while 3.5 percent of consumers use their cards more than 20 times per week.
In contrast, in India and Indonesia, 60 percent of people use their card only once or twice per week. There has been a 19 percent rise in credit card usage among Australians, with 49 percent saying they use their credit card more often than cash and debit cards. Some 30 percent of Australians said they use their credit card less than cash and debit cards.
The lending default crisis earlier this decade does not have appeared to have deterred South Korean consumers from using credit cards: 65 percent of South Koreans use their credit cards more often than cash and debit cards.
According to the report, South Korean consumers have recorded a 41 percent increase in credit card usage. The growth of online shopping is also helping to spur credit usage, with South Koreans using their credit cards online an average of 7.8 times in the last six months, compared to 5.6 times for Australians. In Indonesia the average was two times and in Hong Kong, 2.4.
In China, where huge growth is anticipated for credit cards over the next few years, credit card spending is mostly used for big ticket items. Fifty-eight percent of respondents there say they buy only big ticket items with their card. In Australia this figure was 17 percent.
Repayment habits differ between countries. In South Korea, 81 percent of respondents said they pay off their card in full each month. Australians and Malaysians show a similar pattern of repayment and there is a fairly even split between revolvers and transactors. Across the seven countries, 42 percent carry an ongoing card debt.
Cultural preferences are a major factor when it comes to choosing a card, according to the report. In some countries the appearance and design of a card is key and represents status, but in others discounts and rebates are more popular. In Australia the interest rate is the key feature for consumers, while in South Korea low fees are the key driver. In Malaysia and China, security features and fraud prevention are paramount for consumers.
Cash rebates were the preferred type of reward in relation to loyalty and reward programmes, say 57 percent of respondents. The next most popular reward-related feature is discounts on products and services at 12 percent.
The report asked consumers in the seven economies how usage of credit cards could evolve in the future. When asked if credit cards could double as a form of personal identity card, India and China were most in favour with ‘strongly agree’ responses of 47 percent and 43 percent, respectively. Australians and Malaysians were most opposed, with 33 percent and 43 percent, respectively, saying they ‘strongly disagreed’.
The option of using a credit card to pay taxes was met with most enthusiasm in South Korea and China, where 53 percent and 41 percent, respectively, said they ‘strongly agreed’. Conversely, 38 percent of Australians said they ‘strongly disagreed’ with this idea.
Roy Gori, Citibank Australia’s director of cards, said the study had produced some interesting findings. “We can take a successful learning or product feature in one country but it may not hold appeal in another country,” he said.
The challenge for Citibank now is to find a way to tailor its credit card products to local market preferences in order to drive organic growth and provide innovative features that will bring in new consumers.
Over the last few weeks, Citi has launched the Citi M Visa credit card in Thailand, and what it claims is the biggest credit cards rewards catalogue in the Philippines, in a new air miles partnership with national carrier Philippine Airlines.