A new report by PYMNTS Intelligence and Elan Credit Card surveyed consumers who opened a new credit card in the past year with the intent of determining the motivations for doing so and focusing on how financial stability, spending patterns, and personal recommendations drive card choices today.
Here are four key findings:
1. General-Purpose Credit Cards Grow As a Preference
Nearly 1 in 3 consumers opened a new credit card within the last 12 months, and 4 in 5 were already cardholders. First-time cardholders primarily chose general-purpose cards, which were the most popular choice overall with 66% choosing a general-purpose option.
When it comes to first-time cardholders, credit scores played a factor as well. Those who have prime credit scores, favored general-purpose cards at a rate of 86% and tended to prioritize credit-building opportunities when assessing a new card.
2. Financial Situations Matter
Financially stable consumers — those with better credit scores and living comfortably month to month — were far more likely to have held a credit card before adding another this year, and financial stability also influenced the type of new card chosen.
The survey also found that 26% of consumers reported rewards to be the most important factor when choosing a new credit card while 24% ranked their goal of building credit just as highly. A consumer’s relative financial position predicts which they are most likely to rank higher.
Financially stable consumers tend to prioritize rewards that maximize their everyday spending. They are more likely than financially struggling consumers to opt for co-branded cards that offer such incentives, even if financially stable consumers as a whole tend to prefer general-purpose cards overall. In contrast, financially struggling consumers showed a much stronger preference for choosing general-purpose cards.
Consumers’ motivations for getting their latest credit card vary significantly by their credit history. Among new card users, the largest segment prioritized building their credit, whereas only 16% were most motivated by rewards. In contrast, 28% of repeat cardholders chose their card primarily for rewards, perhaps reflecting their familiarity with credit products. Nonetheless, 20% of repeat cardholders still prioritized credit-building.
Other important factors influencing consumers’ decisions included access to additional credit, lower interest rates, and emergency use. This variation underscores how consumer credit history impacts the motivations behind choosing a new card.
3. How Recommendations Play a Role
More consumers first heard about their latest card through recommendations from friends, family or advisors than anywhere else, including online research or an in-person offer. These recommendations play a significant role in their decision-making process, with 73% of consumers who received them saying recommendations were very or extremely influential.
Financially stable consumers were slightly more likely to be influenced by recommendations than financially struggling consumers. Ads and offers do not appear to resonate with consumers as much as personal recommendations from people they trust 74% share of consumers who received recommendations saying recommendations were crucial in their decision-making process.
More than half of consumers only considered the card they eventually chose, while one-quarter evaluated just one additional option, and few did little to no research on these cards. This trend holds across both financially stable and struggling consumers, showing that regardless of financial circumstances, credit card selection is rarely impulsive. Financially struggling consumers, however, were less likely than financially stable ones to perform extensive or quite a lot of research before deciding. Limited card options and networks without as much information on card options might help explain this behavior, making research and card consideration more constrained for those less financially stable.
4. Usage Patterns Make a Difference
Most consumers get new cards with the intent to use them, and spending patterns align across financial standings.
Whether obtaining a new card as their primary card, for specific purchases or to have on hand in case of emergencies, most consumers who open new credit cards intend to use them. Overall, 57% of consumers use their new cards for one of two purposes: as their primary credit card, or for specific product purchases.
New card users were the most likely to get a new card as their primary card, with 2 in 5 doing so. Financially struggling consumers were the most likely group to use theirs for emergencies, with 1 in 4 doing so. Those obtaining co-branded store cards, meanwhile, were more likely to use them to purchase specific products. This interest prompted many financially stable consumers to reach for co-branded cards. However, consumers’ financial situations had little impact on subsequent spending behavior. Consumers remained more consistent than not in their spending whether they opened cards for emergencies or rewards.
While financially stable consumers generally spend more, especially if their card was intended to replace an existing one, spending on cards used for rewards or emergencies tends to be similar regardless of financial standing.
Access more data and actionable insights in the full report.