Bonus Points and Other Incentives Attract Consumers to Credit Cards

BALTIMORE – Vertis, a leading provider of targeted advertising, media, and marketing services, today announced the results of its proprietary “Customer Focus® 2005: Credit Card” study, which identifies the most appealing incentives for adults to sign up for a credit card. According to the study, 29 percent of men 18-24 years old are interested in receiving points for merchandise/airline tickets, while 14 percent of women in the same age category prefer an initial sign-up bonus such as a rebate or coupon. For 27 percent of men 25-34 the most alluring offer was money back on purchases; meanwhile, 34 percent of women 25-34 expressed most interest in receiving points for merchandise/airline tickets.

“With the competitive environment of credit card offers, companies are constantly challenged to create additional incentives for programs or rewards that will appeal to and entice new customers,” said Janice Mayo, senior vice president, marketing, at Vertis. “It is important for companies to understand which type of incentives will draw consumers and to communicate these offers through an effective medium.”

Additional findings from the study identify direct mail as an effective method to provide information on credit cards, with 53 percent of credit card holders claiming they became aware of their last credit card through this medium. The study also identified an increase in awareness among 18-24 year old males, with 62 percent stating they received information on their last credit card in a direct mail offer, compared to 39 percent in 2002.

The Vertis “Customer Focus® 2005: Credit Card” study shows the following additional findings, which provide insight into credit card appeal and usage among adults:

Obtaining Points and Getting Money Back are Most Appealing Reasons to Select a Credit Card

• 22 percent of credit card holders said that receiving points for merchandise/airline tickets was most appealing when selecting a credit card
• For 21 percent of credit card holders, receiving money back on purchases was biggest incentive, aside from annual fees and interest rates
• Getting an extended or higher limit on a credit card was only appealing to 8 percent of the credit card holders surveyed
• Similarly, the membership status of the card (gold/platinum) appealed to 7 percent of those credit card holders surveyed

Types of Financial Direct Mail Read by Adults

• 76 percent of 18-34 year olds read direct mail on new credit card offers compared to 66 percent of total adults surveyed
• 58 percent of 45-54 year olds read information on balance transfers, compared to 47 percent of total adults surveyed
• On the other hand, 66 percent of 55-64 year olds read financial direct mail on new credit card options for their current card, compared to 61 percent of total adults

How Adults Pay Credit Card Balances

• 44 percent of total adults pay off their credit card balance each month, compared to 51 percent in 2002
• 61 percent of adults 65+ stated they pay off their credit card balance each month, compared to 75 percent in 2002
• 30 percent of 18-34 year olds are making a partial payment to their credit card and their balance is reducing, compared to 46 percent in 2002
• Four percent of 35-44 year olds are making a partial payment to their credit card and their balance is growing, compared to 11 percent in 2002