Gen Y refuse to pay annual credit card fees
The proportion of credit card holders over the age of 18 who are choosing product with no annual fees is increasing according to a recent Roy Morgan survey of 50,000 Australians.
While approximately one in six credit cards now have no annual fees (17%) amongst young people aged 18-24 cards with no annual fees are disproportionately popular, with 27% of young people using them on a daily basis.
Only four years ago it was only 12% of cards could claim no annual fees compares with 17% as of December 2013 and increase of 480,000 users.
This increase was also driven predominantly by the over 50s age group where the number of credit cards with no annual fees increased by 52% followed by a 36% increase for the 25- 34 age group, 29% increase for 18-24 and 25% for 35-49.
Among the big four Commonwealth Bank continues to capture the highest market share of credit cards with no annual fees with 24%, followed by Westpac (19%), nab (13%) and ANZ (10%). During this period Commonwealth Bank has continued to dominate the youth market, with a market share of 46% among 18-24 year olds.
For the major credit card brands in the 12 months to December 2013, MasterCard had the highest proportion of its credit cards with no annual fee (20%) followed by American Express (15%) and Visa (14%).
According to Roy Morgan Industry Communications Director Norman Morris a declining credit card market has put more focus on the features that credit cards offer. "Credit cards that offer the convenience of no annual fees are increasing in popularity across all age groups, however the lack of annual fees are usually offset by being charged a higher interest rate and receiving minimal other benefits and features. Getting the balance right between fees and features is critical to success in this market."
The uptake of no annual fee credit card options can also be considered a reflection of improved consumer awareness about the impact of financial product fees and consumers willingness to change providers for a more competitive product.Sick of fees? See the range of $0 annual fee cards available in the market right now.