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DID YOU KNOW?

• 20.8 is the median age at which a U.S. consumer under 35 first gota credit card .

• 40.6 years is the median age for credit card adoption for a consumer over the age of 65.

• Approximately 60 % of consumers have a rewards credit card.

• Worldwide, consumers carry more than 1 billion Visa cards Additionally more than 450 million of those cards are in the United States.

CREDIT CARD OWNERSHIP IS A RISING TREND

Credit card ownership is a rising trend that doesn’t appear to be disappearing anytime soon. In 2000 there were 159 million credit cardholders in the United States , 173 million in 2006, and that number is expected to grow to 222 million Americans by 2012.(U.S. Census Bureau)Furthermore 84% of the student population overall have credit cards. This is a huge increase of approximately 11 percent since the fall of 2004.

LARGE COMPANIES TARGETING STUDENTS Credit card companies aim at targeting university students, as they have less responsibilities and a large amount of debt. In fact in 2011 only 2 percent of undergraduates have no credit history. Additionally 41% of college students have a credit card. For these students with cards, about 65 percent pay their bills in full every month, which is higher than the general adult population. Since 2004 -2011 : the number of students who arrived on campus with a credit card has increased from 23 percent to 39 percent.

RETAIL STORE CREDIT CARDS Retail credit cards can be divided into two forms: the private label and the in-house. The private label is the dominant form in which a bank runs the card program on behalf of the retailers. On the other hand the in-house credit card is where the retailer runs its own card program.

A large and growing number of major U.S retail chains aggressively advertise their own branded retail store credit card to improve customer loyalty and ultimately boost sales. In fact retail store credit cards represent the greatest portion of cards issued, at 38.6% of the total. Bank credit cards follow, at 37.7% of the total. Although retail stores issue slightly more credit cards than banks, bank cards are used for the main share of total purchases, representing 64.2% of the annual dollar volume.

So…. Why would someone bother getting various

retail cards when they could just just

use their one credit card for all

purchases?

INCENTIVES FOR USING RETAIL CREDIT CARDS• Lifetime memberships with the store therefore

better treatment• Discounts off selected purchases• Complimentary shipping • Special offers and promotions• No interest or decreased interest for relevant

stores• No annual fees• Manage accounts online• Returns without receipts• Special customer care and attention

Sounds pretty good. So what is to stop people

making all their purchases using in store credit cards?

CONS FOR USING IN STORE CREDIT CARDS • Retail credit cards can lead to lower credit

scores: If you don’t use your credit card a lot, it is entered into the system as a credit inquiry. Multiple credit inquires in a credit report can trim a credit score therefore making it harder to get a loan.

• Retail credit cards are in superior to credit cards due to the low loan rate. People can get very high credit card limits each month and therefore a retail credit store limit could be insufficient. It is clear that the nation has a problem with lending too much money they can not pay back. Therefore people may not be enticed by retail credit stores.

CONS CONTINUED

• Inconvenience: The average American person has 3.2 credit cards. This is already a large number to have in a wallet, therefore carrying around a range of retail credit cards could become annoying and inconvenient.

• Bankruptcy: Chain store failures are a growing concern for cardholders amid a retail environment where big, brand-name stores are going completely bankrupt.

CONCLUSION

• It is unlikely that retail credit cards will ever completely take over bank issues credit cards.

• There are many positives and numerous negatives for joining up for a store credit card.

• The future will see many more retail stores add in store credit cards to their amenities because it creates customer loyalty, brand awareness and builds a strong relationship with their customer.

REFERENCES

• http://www.nerdwallet.com/credit-cards.php?error=404

• http://www.bankrate.com/finance/credit-cards/store-credit-card-good-deal-1.aspx

• http://www.creditcards.com/credit-card-news/4-reasons-you-should-get-a-department-store-credit-card-1280.php

• http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php

• http://www.credit.com/press/statistics/credit-card-statistics.html

• http://www.hoffmanbrinker.com/credit-card-debt-statistics.html

• http://www.store-creditcards.com/store-credit-cards.htm

• http://retailindustry.about.com/od/retailtrendsetters/f/Which-U-S-Retail-Companies-Offer-Credit-Cards-To-Customers-Complete-List.htm

• http://www.bankrate.com/finance/credit-cards/store-credit-card-good-deal-1.aspx