Bank Credit Card Users: an Updated Profile

ABSTRACT - Demographic and qualitative profiles of current bank credit card users are developed. These results are compared to earlier profiles developed during the introductory stage of bank credit cards, and implications are considered for the life cycles of marketing strategies as a financial service innovation moves from the introductory to the mature stages of the adoption cycle.


William O. Adcock, Jr., Elizabeth C. Hirschman, and Jac L. Goldstucker (1977) ,"Bank Credit Card Users: an Updated Profile", in NA - Advances in Consumer Research Volume 04, eds. William D. Perreault, Jr., Atlanta, GA : Association for Consumer Research, Pages: 236-241.

Advances in Consumer Research Volume 4, 1977   Pages 236-241


William O. Adcock, Jr. (student), Georgia State University

Elizabeth C. Hirschman (student), Georgia State University

Jac L. Goldstucker, Georgia State University


Demographic and qualitative profiles of current bank credit card users are developed. These results are compared to earlier profiles developed during the introductory stage of bank credit cards, and implications are considered for the life cycles of marketing strategies as a financial service innovation moves from the introductory to the mature stages of the adoption cycle.


The rapid growth of bank credit card plans during the late 1960's and early 1970's provided the basis for several major consumer research studies. These were designed to identify characteristics that distinguished bank card users from non-users or that differentiated among various categories of card holders.

In some of the earliest research, Matthews and Slocum (1969, 1970 and 1972) attempted to distinguish "convenience'' users from "installment" users. An installment user was defined as a card holder who did not repay his total balance each month and who paid finance charges. Matthews and Slocum found that installment users had lower incomes and belonged to lower social classes than convenience users. These researchers and Curtis (1972) debated the relative merits of social class and income as predictors of credit card usage patterns.

In 1971, Plummer developed an even broader descriptive profile of bank card users. Using data gathered in 1968, he reported an early application of life style analysis to identify qualitative differences between users and non-users. He found credit card users to be more active, urbane, fashion conscious, risk-oriented, achievement-oriented, and contemporary minded. In addition, they were more involved in decision-making, and came from higher socioeconomic levels than non-users.

Following Plummer's lead, Wiley and Richard (1974) used psychographic analysis to identify differences among heavy, moderate, and light users of bank credit cards. They described their results as generally supportive of Plummer's earlier study. Using factor names drawn from Plummer's study, they identified the best predictive variables as Dynamic Leader, Price Conscious, Fashion Conscious, Credit User, Community Minded, Financially Satisfied, and Income. They also reported that heavy users, as opposed to light users, tended to be younger (25-34), to be college graduates, and to have professional or managerial occupations. However, their samples were drawn from applicants for cash dispensing machine cards, another bank service innovation. Thus, as the researchers acknowledged, their findings could not be generalized to all bank credit card users.

Awh and Waters (1974) utilized discriminant analysis to distinguish active from inactive bank card holders.

These researchers included in their model, as a consumer characteristic, "attitudes toward bank charge cards." They reported that attitude variable to be most important in explaining the difference between active vs. inactive bank card holders. They also found that active bank card holders were more likely to be younger, to be users of other types of charge cards, and to rank higher on a socioeconomic index based only on occupations. Income provided no additional insights with respect to their model.


The purpose of this paper is to develop demographic and qualitative profiles of current bank card users. In so doing, the authors intend to make comparisons with Plummer's findings and with findings of other researchers as well. As pointed out above, Plummer and others used data collected during the introductory stages for bank credit cards. Plummer's data, gathered seven years earlier than the data on which the present research is based, were collected from a nationwide survey of 1,845 adults, and they showed that 17 percent were bank card users. Of course, whereas these data are representative of the entire nation, the data used in this study are only representative of the metropolitan area under consideration.

Major changes have taken place since the Plummet survey relative to the marketing and usage of bank credit cards. A survey conducted for the Board of Governors of the Federal Reserve System (1973) revealed that the numbers of banks with credit card outstandings increased from 510 in 1968 to 1,631 in 1972. Also, a larger number of people now use bank cards. Russell (1975) found that numbers of card holders doubled in 1969, the year following the Plummet survey.

Changes in hank credit approval procedures have been an important factor in the growth and customer mix of bank card plans. In 1970, federal legislation was enacted to prohibit unsolicited mailings of credit cards. Applications are now required, and banks can exercise more control over credit approvals. Higher average income for new card holders is a likely result of this change in credit approval procedures.

The question of interest in the present study is whether the profile of current bank card users differs from the profile of the earlier group of users. The ability to develop an up-to-date profile may provide additive knowledge about buyer behavior, and it may well suggest more appropriate marketing strategies for both banks and retailers to use in order to secure and hold a larger number of customers.


The data for this study are from a sample of 1,200 residents of a metropolitan area of 1.5 million people. A total of 952 usable telephone interviews were obtained. The sample was considered generally representative of this metropolitan area. Calls were allocated among telephone exchanges in proportion to numbers of residential listings per exchange with these data based on an updated tabulation supplied by the local telephone company.

Random digit dialing was used to place calls within each exchange. One advantage of this technique is the opportunity it provides to interview persons with new or unlisted telephone numbers. These are often the younger and more mobile individuals who have been described in earlier studies as likely bank card users. A disadvantage of any telephone survey is that very low income persons who may not have telephone service will not be represented. However, very low income consumers are not likely to be a significant market segment for bank credit cards.

Interviews were conducted during a six week period in February and March, 1975. Calls were placed between 6 p.m. and 9:30 p.m. on week nights and Sundays. Interviews were conducted only with household members 18 years of age and older.

During the interview, respondents were questioned about which bank and department store credit cards they used. Information was also gathered on each respondent's demographic characteristics, the social activities in which he or she participated and the relative importance (on a three-point scale) of ten store image characteristics. Seven true/false psychographic questions were also administered to each respondent.


Credit Card Usage

Survey respondents were asked if they had any type of charge account with any bank credit card plan or with any of the major department or discount stores that serve this metropolitan area. Results to this question, summarized in Table 1, include two findings of particular interest. First, the data confirm the earlier finding of Awh and Waters that bank credit card users tend to be users of other types of credit cards. Chi square analysis was used to test the significance of the relationship between bank card usage and retail charge account usage. These relationships were found to be significant at the .01 level for all five retail store categories included in Table 1.

The second finding also summarized in Table 1, is that 47.8 percent of all survey respondents are bank credit card users. Bank cards are used by more respondents than are any of the retail charge account plans. As compared to the data in the Plummer study, these data show that diffusion is much more widespread now than then.

Demographic Characteristics

Demographic profiles developed in the present study are presented in Table 2. Chi square analysis was used to test the significance of these results. Earlier findings that bank credit card users tend to have higher incomes were confirmed at the .01 level of significance Better educated individuals and married persons are also more likely to be bank credit card users, again at the .01 level of significance. In addition, males are more likely than females to use bank cards (.01 level).

The studies by Wiley and Richard and by Awh and Waters reported that bank credit card users tended to be younger than non-users. Plummer, however, reported that middle-aged persons were the most likely users of bank credit cards. The present research data are more similar to Plummer's results than to the other studies. The survey shows that 40.2 percent of all users are in the modal 25-34 age range; the majority, 51 percent are over age 34 while including 35.4 percent who are over 44 years of age. It is likely that the age distribution is not skewed more toward younger persons among current bank credit card users because of more stringent credit criteria. Age is likely to be correlated with such credit approval factors as length of employment, length of residence, and income.



The demographic differences among consumers appear to have major implications for marketing strategists. The results with regard to income seem to supply particularly valuable insights into the nature of the bank credit card market. For example, bank credit card usage is most widespread among the highest income group(S25,000 and over) with 78.1 percent of the group being card users. Furthermore, 64.6 percent of all bank card users have incomes between $12,000 and $25,000. Thus, the majority of bank card users fall into the middle to upper-middle income range. The bank credit card seems to have become a middle and upper-middle income, mass-market financial service. This conclusion, in turn, suggests that dramatic differences in life styles between users and non-users as found by Plummet, are now less likely to exist.

Leisure Activities

To examine the existence and/or extent of life style differences between bank card users and non-users, respondents were queried about their participation in each of fifteen recreational activities. From Figure 1, one can see that bank credit card users are more likely than nonusers to participate virtually in every one of the activities listed. The only exceptions are that male users participate less than male non-users in hunting and fishing, camping, and attending rock concerts, while female users participate less than female non-users in attending rock concerts. These findings support the Plummet conclusion that bank credit card users tend to be more active than non-users.

Although differences in activity levels exist, the survey data reflect a general similarity in activity preferences between bank card users and non-users. Activities were ranked for each group of respondents--male and female users and non-users--according to the percentage of each group that participated in each activity. The similarities among rankings were tested for significance using Spearman rank order correlation coefficients. The rankings of leisure activities by male users and non-users are related at the .01 level of significance. The rankings by female users and non-users are related at the .01 level of significance.



The types of activities participated in are highly similar for both groups. Therefore, the only leisure activity difference between bank card users and non-users appears to be one of extent of participation.

Life Style Perceptions

Male and female respondents were each asked seven true/ false questions related to life style perceptions emphasized in the Plummer study. The responses to these statements are summarized in Table 3. Chi square analysis was used to test the significance of the differences between groups for each true/false statement.

Two of Plummer's findings were found still to be valid. These are the pre-existing tendencies toward credit utilization by bank card users and gregariousness by bank card users. The patterns of responses to "Buy things with a credit/charge card" among males and "Do most of the talking in a group" among females are significantly different (.05 level) between users and nonusers.

Several statements, however, elicited replies from male bank card users that differed from the results of the Plummet study. Plummet found "contemporary minded" to be a common characteristic of users, but slightly less than half of the male users in this study agree that "Modern ways are the best." Plummer also found that male bank card users emphasized fashion and appearance. In the present study, only 32.0 percent "Want to look different from others" and only 20.5 percent agree that "Appearance is more important than comfort in the way I dress."

Females appeared more likely to respond in a manner that might have been predicted from the Plummer study. Most female bank card users replied that they were active, frank and outspoken, up to date on most things, and willing to try new ideas. However, the pattern of response is not significantly different (.05 level) for bank card users vs. non-users.

Store Image Characteristics

Respondents were asked to rank the importance of each of ten store characteristics on a three-point scale (very important, moderately important, and not important at all). An average importance score for each of these characteristics was computed for male and female users and non-users. The importance scores are depicted on Figure 2.

Female bank card users tend to assign higher importance than female non-users to every store characteristic except price. Male users also tend to assign higher levels of importance to most characteristics, with the exceptions of price and location.

All groups, male or female, users or non-users, rate merchandise quality and returns adjustments policies as the most important store characteristics. Interestingly, all groups rate credit and billing policies as least important.

While differences do exist in degrees of importance for each characteristic, there is a general similarity between users and non-users in terms of the ranking and relative importance of each of the store characteristics. These were ranked in order of importance scores for each group of respondents. The similarities among rankings were tested for significance using Spearman rank order coefficients. The rankings by male users and non-users are related at the .01 level of significance and the rankings by female users and non-users are also related at the .01 level of significance.


The present study has found that bank credit card users differ significantly from non-users with regard to a number of demographic characteristics. Bank card users are more likely than non-users to have middle or upper-middle incomes, to be better educated, to be middle-aged or older, to be married, and to be males. It is likely that these differences reflect bank credit approval criteria as well as buyer behavior.

It was found that bank card users tend to be users of retail charge accounts, and male bank card users have more favorable attitudes toward the use of credit than do non-users. Female users tend to be more gregarious than non-users, but both users and non-users prefer the same types of activities. Users tend to assign higher levels of importance to most store image characteristics, but both users and non-users rank the importance of the store characteristics in a very similar manner.



This study also found that 47.8 percent of the survey respondents were bank card users. This level of usage is contrasted with the 17 percent usage rate that Plummer found seven years earlier. Bank credit cards can no longer be considered an innovation. They have clearly reached a mass-market stage of adoption.

Implications from this study relate primarily to the life cycle of marketing strategies for financial service innovations. Earlier studies may have accurately described the market segments which were the early adopters of bank credit cards, and may have led to the development of successful strategies aimed at these segments.

However, it appears likely that diffusion of a financial service innovation into a mature, mass-market stage tends to minimize the life style differences between adopters and non-adopters which were reported in earlier studies. Thus, introductory marketing strategies designed for specific life style segments may be invalid for later stages of the adoption cycle. Marketing strategies to cope with later stages in the adoption cycle might therefore be considered to replace those used in the introductory stage.

A viable marketing objective during the early stages of bank credit card introduction was to convince non-users to become users. There now appear to be few non-users who are able to meet hank credit criteria. Hence, it can be assumed that among those who are eligible diffusion is just about complete. Therefore to attack this mature, mass-market of bank credit card users, it might be well for banks to consider designing marketing strategies with goals:

1. to increase credit card usage by existing customers;

2. to convert customers from one bank card plan to another;

3. to use the credit card as a means of marketing other services offered by the bank.

Many hanks have already adopted multiple service "package" plans that may help accomplish these purposes. The INTRODUCTION of electronic funds transfer systems may offer further opportunities to satisfy these objectives. It is reasonable to assume, however, that armed with a more precise profile of the bank credit card users as developed in this study banks can formulate their strategies with a greater likelihood of success.






R. V. Awh and D. Waters, "A Discriminant Analysis of Economic, Demographic, and Attitudinal Characteristics of Bank Charge-Card Holders: A Case Study," Journal of Finance, 29(June, 1974), 973-980.

William W. Curtis, "Social Class or Income?" Journal of Marketing, 36(January, 1972), 67-68.

Federal Reserve Board of Governors, Bank Credit-Card and Check-Credit Plans (Washington: 1968).

Federal Reserve Bulletin, "Credit-card and Check-Credit Plans at Commercial Banks," (September, 1973), 646-653.

H. Lee Matthews and John W. Slocum, Jr., "Social Class and Commercial Bank Credit Card Usage," Journal of Marketing, 33(January, 1969), 71-78.

H. Lee Matthews, "Rejoinder to 'Social Class or Income?'" Journal of Marketing, 36(January, 1972), 69-70.

Joseph T. Plummer, "Life Style Patterns and Commercial Bank Credit Card Usage," Journal of Marketing, 35(April, 1971), 35-41.

Thomas Russell, The Economics of Bank Credit Cards (New York: Praeger Publishers, 1975).

John W. Slocum Jr. and H. Lee Matthews, "Social Class and Income as Indicators of Consumer Credit Behavior," Journal of Marketing, 34(April, 1975), 59-74.

lames B. Wiley and Lawrence M. Richard, "Application of Discriminant Analysis in Formulating Promotional Strategy for Bank Credit Cards," in Advances in Consumer Research, Vol. II, edited by Mary Jane Schlinger (Proceedings of the 1974 Annual Conference of the Association for Consumer Research), 535-544.



William O. Adcock, Jr., (student), Georgia State University (student), Georgia State University
Elizabeth C. Hirschman, Georgia State University
Jac L. Goldstucker


NA - Advances in Consumer Research Volume 04 | 1977

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