More credit card holders in Australia are ditching multiple cards in favour of a single one, new research has found.
According to a 2019 Australian credit card satisfaction study undertaken by J.D. Power, the number of cardholders with only one credit card has increased to 61 per cent in 2019, up from 56 per cent in 2018.
Bronwyn Gill, the head of global business intelligence at J.D. Power, said “an overwhelming number of cardholders use fewer than three types of benefits and services, so issuers should focus on quality instead of quantity”.
She said credit providers will need to work to tailor their benefits and services based on cardholders’ evolving needs, which will ultimately benefit consumers.
Growth of ‘buy now, pay later’ services
J.D. Power’s research also found that there is a shrinking demand for credit cards in Australia, which coincides with a rise in alternative instalment services.
More than one in five cardholders have utilised buy now, pay later services, according to the study, with younger cardholders adopting the method of payment three times faster than other cardholders.
According to J.D. Power, while traditional issuers still lead the market, their dominance cannot be taken for granted in the long term.
Mobile app usage rate plateau
Less than half of cardholders indicated usage of their credit card mobile app in the past 12 months, the research showed, with J.D. Power considering this as a concern for card issuers that have placed a strong emphasis on the digital experience.
Credit limit increase offers still common
Concerningly, the report also showed that 57 per cent of cardholders who were offered credit card limit increases said such offers were unsolicited.
This is despite the 2018 introduction of legislation that prohibited unsolicited credit card limit increases.
Reading the fine print
Less than half of cardholders have read the terms and conditions on their primary card, it was also flagged in the report.
Reasons given for the lack of knowledge were attributed to the length of the text, or customers not fully understanding the terms and conditions or what they were reading.
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