Young consumers in the US are said to be
showing more interest in credit cards as the economy gradually
starts to pick up, according to a study by the Auriemma Consulting
Group (ACG).
One-fifth of younger consumers (under 25) say
they plan to obtain a new credit card this year, compared to 11% of
all those surveyed. Dr Patricia Sahm, managing director at ACG
notes that as new regulations have put a stop to the marketing of
credit cards to college students, they are now less likely to own
more than one credit card – making them a “particularly responsive
segment”.
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The study shows the consumer’s prior
experience with a bank is the most important factor in their
decision to buy additional products. Among those customers who had
multiple relationships, 42% cited good customer service as their
primary motivation for consolidation, compared to 35% who said
their decision was driven by a better rate.
“After writing off huge losses of bad debt in
the recession, many banks are assessing customer needs as the
economy improves, making serious efforts to establish deeper,
multiple product relationships that integrate the total value of
their customers,” said Sahm.
“Of course, banks need to make sure their
offerings are competitively priced, but customers who have
experienced excellent service may choose that provider without
doing extensive comparison shopping.
“A strong service reputation can be more
important than having the absolute best price.”
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By GlobalDataACG claims that young adults are less likely
to have strong emotional ties to their bank and put less emphasis
on local presence than older consumers do. It says the large card
networks like American Express and Discover may find it easier to
compete for the younger segment than bricks-and-mortar banks.
