News & Views - Savantor

Credit card outlook

Monday, 16 August 2010

Now we are in the middle of the holiday season it also seems to be survey season.  On the basis that what happens in the US happens in Europe sooner or later it was interesting to note that PayPal is now more popular among Americans for making online payments than debit cards according to a survey from Auriemma. The survey found that among the respondents who shop online:

·         credit cards continue to be the dominant method of payment, used by 70%.

·         39% use PayPal

·         37% use debit cards

·         more than three quarters of respondents actually have a PayPal account, up from 55% two years ago.

·         credit cards are considered the most convenient way to pay for online purchases - PayPal is rated as the most secure. 

Another survey by confused.com shows that British consumers spend £150 million on late payment credit card charges.  The research found that:

·         26% credit card holders have been charged at least once in the last 12 months for missing a payment.

·         8.5% have been charged three or more times in the same period. 

·         57% of credit card holders do not have a direct debit set up to pay off the minimum amount.

Also some worrying news for credit card issuers showed that during the first three months of 2010, write-offs rose to £1.25 billion – the second highest quarterly amount on record.  Undeterred by this Tesco has launched a new credit card which carries 0% interest on purchases for the first 13 months as well as a nine-month interest-free balance transfer deal. Apparently the most attractive credit card on the market at the moment.  Will other issuers respond?

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