While the ranks of credit card holders remains relatively flat, user demographics are evolving as young adults return to credit card use, says a report from Mercator Advisory Group.
More than half of young adults in the U.S. now use credit cards, especially 25–34 year olds, who now are as likely to do so as the average consumer.
Not only are young adults now more likely than average to use co-branded credit cards, they are also more likely than average to keep the credit cards issued by their primary financial institution top of wallet: 64% of young adult credit cardholders report that they use their credit card issued by their primary financial institution most often.
“Credit card user demographics are changing and new cardholders, who appear to be predisposed to keeping their primary financial institution’s credit card at top of wallet, are demanding new tools, more valuable rewards, and higher credit limits to stimulate their use,” says Karen Augustine, manager of Primary Data Services including CustomerMonitor Survey Series at Mercator Advisory Group and author of the report.
Smartphone owners (52%) and those who also own tablets (57%), especially those who have paid for goods and services by mobile phone (78%), are more likely than average to use the credit card issued by their primary financial institution most often.
The report from Mercator Advisory Group’s Primary Data Service shows that the new cardholders are especially likely to use co-branded cards to extend their credit. Mercator Advisory Group suggests that higher credit card limits along with lower fees and more valuable reward programs will motivate many to increase spending on their credit cards.