A new consumer credit behavior study released by i2c breaks down generational activity while providing direction for service providers.
The study asked the following questions:
- How many cards do consumers have, and how much of their primary card’s credit are they using?
- What do consumers use credit for, and how often?
- What features made consumers get their primary credit card, and why is it their top of-wallet card?
- How could new payment features increase consumer use of credit?
Millennials and Generation Z use more of their available credit each month than other generations, at 25-28%. However, they only hold one or two cards. Baby boomers and Generation X tend to have at least three cards. They only use between 16-19% of their limits.
Higher credit limits are one reason why. People across all income brackets tend to use around the recommended 20%, though those with higher incomes do access higher credit lines.
Consumers with at least three credit cards use the primary one more frequently than those with fewer; 46% swiping multiple times a week. i2c speculated this is because this group likely uses cards more often, but it highlights the importance of not necessarily being the only card, but the one they think about first.
Rewards are still the most common reason to get a card. Priorities often shift based on the reason for getting the card. Bill payers prioritize security. Emergency-only users consider interest rates first.
Nearly half of Generation Z said they’d use their main card more often if given custom payment features, like installment options or real-time fund source selection.
Even with many consumers holding three or more cards, primacy matters. Folks with that many cards actually use their primary one more often than those with only one or two. Providers could attract more business from younger consumers by offering more payment control options and higher credit limits.
“Younger consumers have fewer cards but rely more heavily on them, creating greater risk and opportunity for card issuers targeting this demographic,” the i2c report states. These consumers represent higher engagement potential but require thoughtful credit limit management strategies.”
Younger groups more often use credit to pay bills. Those with only one or two cards most likely have them for bills, payments or discretionary purposes.
The incentives consumers respond to most vary depending on why they obtain the card in the first place. Those making everyday purchases prioritize rewards and cash back (46.8%), the same as ones seeking discretionary spending (37.4%). Close to one-third (31.5%) of the latter consider high credit limits first.
If someone uses the card for specific products, 33.6% prioritize rewards and cash back, while 32.9% seek a good interest rate above all else.
Emergency spenders most consider interest rate (31.5%), rewards or cash back (30.3%), a high limit (27.7%) and security (25%). Bill payers first look at good security (33.5%), rewards or cash back (33.1%), interest rate (32.3%) and a high limit (32.2%)