Cultural differences seen in rewards credit cards

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By: Wise Marketer Staff |

Posted on July 11, 2007

A report from Citibank has revealed both similarities and differences in credit card trends in Australia, China, Hong Kong, India, Indonesia, Malaysia and South Korea. The 'Payment Evolution Report' highlights usage, payment and attitudinal trends and concludes that culture plays a key role in both credit card consumption and behaviour.

On average, Australians have 2.1 credit cards each, the lowest in the survey. At the other end of the scale, Malaysians have an average of 3.26 cards with 84% of the population owning three credit cards.

Card usage figures
Australians are heavy credit card users, using their cards an average of 5.4 times per week. Twelve percent of Australians use their card 11 or more times per week and 3.5%, more than 20 times per week. In contrast, in India and Indonesia, six in ten (60%) of people only use their card once or twice per week.

Two thirds (65%) of South Koreans use their credit card more often than cash/debit, and have recorded a 41% increase in credit card usage. There has been a 19% rise in credit card usage amongst Australians with 49% saying they use their credit card more often than cash/debit. Thirty percent of Australians said they use their credit card less than cash/debit.

Online card usage
In terms of online usage, South Koreans used their credit card online an average of 7.8 times in the last six months compared to 5.6 times for Australians. In Indonesia the average was 2.0 and in Hong Kong, 2.4.

Credit card spending on big ticket items is the norm in China with 58% of respondents there saying they only buy big ticket items with their card. In Australia this figure was 17%.

Repayment habits
In South Korea, 81% of respondents said they pay off their card in full each month. Australians and Malaysians show a similar pattern of repayment with a fairly even split between revolvers and transactors.

Across the seven countries examined by the report, 42% of credit card users carry an ongoing card debt.

Culture's influence
Citibank's report highlights the role culture plays when it comes to choosing a credit card. In some countries the appearance of a card is key and represents status, but in others discounts and rebates are the main attraction.

In Australia the interest rate is the number one feature, in South Korea it's low fees and in Malaysia and China it's security features and fraud prevention that tops the list.

The loyalty reward
Cash rebates were the preferred type of reward in relation to loyalty and reward programmes with a 57% response. Second was discounts on products and services at 12%.

Numerous questions were asked in relation to the future of credit cards. When asked if credit cards could double as a form of personal ID, India and China were most in favour, with "strongly agree" responses of 47% and 43% respectively. Australians and Malaysians were most opposed with 33% and 43% respectively saying they 'strongly disagreed'.

The option of using a credit card to pay taxes was met with most enthusiasm in South Korea and China where 53% and 41% respectively said they strongly agreed. However, 38% of Australians said they strongly disagreed with the idea.

Citibank Australia's director of cards, Roy Gori, said that the study had produced some interesting findings and highlighted the interesting position Citibank finds itself in as a global card issuer: "It is challenging to address and adapt to the needs of so many diverse cultures and needs. We can take a successful finding or product feature in one country but it may not hold appeal in another country."

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