Americans are making more money these days than they were during the depths of the national recession, and the improvement in their financial situation has led them to increase their spending, according to a new report on credit card spending from comScore. In addition, card companies have tried toentice consumers to open news accounts by offering lower interest rates and fees on their credit cards.
In all, 20 percent of consumers said they shopped around for a new credit card in the last year, and 34 percent indicated they were feeling more confident about the economy, the report said. Low interest rates on their credit card debt was deemed the most important factor in selecting such an account, with 40 percent saying this was their primary consideration. Another 28 percent cited cards with no annual fee as being most important.
"As we see consumer economic sentiment improve, we're also seeing a corresponding increase in retail and e-commerce spending along with increased card shopping, especially among those in the subprime sector," said Sarah Lenart, comScore vice president of financial services. "With shopping and card applications expected to continue to increase in 2011, consumers are likely to place even greater emphasis on competitive card features and offerings as well as enticing rewards programs."
However, many consumers – 13 percent – also wanted to earn rewards points for every dollar of credit card debt they took on, the report said. Among these options, 57 percent of respondents said they would like to earn cash back rewards the most. Meanwhile, the ability to earn points with a specific merchant and flexibility in redeeming accrued rewards were tied for second-most popular at just 13 percent.
Most consumers also spent the year adopting new digital banking methods, as 74 percent of respondents said they learned about their account by going online, and 59 percent said this was their primary method. Another 29 percent used their mobile phone – either through a Web browser or specific application – to complete transactions.
Consumers may be getting a better handle on their finances, as instances of delinquent and defaulted debts of all types have been steadily declining in the last year.