The Wallet Wars — Round 5

In the earlier blogs I talked about trends among credit card owners. What about people who are in market for credit cards? Are they seeking features similar to what current credit card owners find appealing? What resources do they use when they shop? Where do they apply?

What are they looking for?

Features shoppers sought in credit cards are illustrated in Chart 1. Shoppers were asked to rank the features they sought. The higher the rank, the more attractive that feature was to the shoppers. Similar to current owners, shoppers also sought “˜no annual fee’. Interestingly though, shoppers seemed to find low interest rates more attractive than rewards. The significance of lower interest rates could be due to the economy and also due to the credit card act. Another surprising finding was that shoppers ranked bonus through exclusive online shopping sites higher than other rewards like cash back or airline miles. This could be in response to specific promotions going on during the period or more options being built in to such sites.

How do they shop?

Chart 2 below illustrates the resources shoppers used during their credit card shopping process. In general, online resources like credit card websites and search engines are popular shopping resources. A fourth of the shoppers took recommendations from family/friends, yet about the same share referred to product comparison sites or online 3rd part reviews. Credit card companies’ website was also the most influential shopping resource (refer to Chart 3). Offline resources like recommendations from family/friends, local branch and direct mail are more influential than comparison websites or online 3rd party reviews.

When it comes to actually applying for the card, again credit card company websites were most widely used. An interesting thing to note from Chart 4 below is that affiliations seem to be working to get more applicants for the credit card issuers. Applying through affiliate sites seems to be especially working, as very few apply at affiliate stores. Although offline resources are influential resources, shoppers prefer online channels for applying.


  • Different features attract different segments. Depending on their strategic objectives, credit card issuers can attract the right segment by including and marketing the appropriate features
  1. No annual fee attracts highly loyal users
  2. Big spenders like cash back
  3. Airline miles can attract high frequency users as well as big spenders
  4. Minimum balance paying segment is most attracted to low interest rates and no annual fee
  5. Entire balance paying segment finds cash back, reward points, and miles on every purchase as well as bonus on specific purchases more appealing than the minimum balance paying segment

This is the fifth and final blog in a series of five blogs that Compete published on trends in the credit card industry during March-April. In April, Compete will publish a whitepaper with more details on trends discussed in these blogs. To receive this complimentary whitepaper, please email your request to