Discover Survey Shows Consumers More Satisfied with No Annual Fee Credit Cards
RIVERWOODS, Ill.--(BUSINESS WIRE)--May 7, 2019--A new survey from Discover suggests that paying an annual fee on a credit card does not always guarantee satisfaction with it. The collected data showed that 70 percent of consumers are very satisfied with their credit cards with no annual fee, while in contrast, only 35 percent of respondents said they are equally satisfied with their credit cards that require an annual fee.
The survey found that 66 percent of consumers said a credit card’s annual fee factors into their selection of it, and similarly, 60 percent said having no annual fee is a very important factor when they choose a card. Most people who pay an annual fee reported paying between $51-100.
Among consumers actively considering switching credit cards, the number one reason – 54 percent – is to avoid paying the annual fee. Older consumers are more likely to consider switching to a new credit card because they do not want to pay the annual fee – 78 percent of pre-boomers, 67 percent of baby boomers and 58 percent of Gen X, compared to 46 percent of millennials and 41 percent of post-millennials.
“Our survey found that the most popular benefits for paying an annual fee are to receive cash-back rewards (52 percent) and travel benefits/rewards (48 percent),” said Andrew Hopkins, senior vice president of marketing at Discover. “We don’t think our cardmembers should have to pay a fee to get great perks, which is why we provide a full suite of credit cards with a variety of benefits, all without annual fees.” 1
When it comes to paying annual fees, younger generations are more likely to participate, as 59 percent of post-millennials and 52 percent of millennials have a credit card with an annual fee, compared to 47 percent of Gen X, 43 percent of pre-boomers and 41 percent of baby boomers.
Thirty-seven percent of overall respondents said they have closed a credit card due to the annual fee, and about one-third, 32 percent, said their one-year anniversary with the card is typically when they regret paying the annual fee.
“The twelve month mark seems to be a crucial moment in time for the relationship between many of the surveyed cardmembers and their credit cards,” said Hopkins. “One year usually gives cardmembers a good ‘test drive’ period with their card, when they can get a sense of their card’s benefits and features. For new Discover card members, it’s also a time when they see their Cashback Match; when we automatically match all the cash back they have earned at the end of their first year.” 2
About the Survey
All figures, unless otherwise stated, are from a Dynata (formerly Research Now/SSI) survey conducted on behalf of Discover Financial Services. The survey was conducted online; fielding from February 12-17, 2019 with a total sample size of 1500 US adults (ages 18+), including 96 post-millennials (18-21), 421 millennials (22-36), 461 Gen X (37-52), 393 baby boomers (53-71), and 129 pre-boomers (72+). The figures have been weighted and are representative of all U.S. adults. The maximum margin of sampling error was ±2.53 percentage points with a 95 percent level of confidence.
Discover Financial Services (NYSE: DFS) is a direct banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company issues the Discover card, America’s cash rewards pioneer, and offers private student loans, personal loans, home equity loans, checking and savings accounts and certificates of deposit through its direct banking business. It operates the Discover Global Network comprised of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation’s leading ATM/debit networks; and Diners Club International, a global payments network with acceptance around the world. For more information, visit www.discover.com/company.
1 Discover Credit Cards: 0%-25.24% intro APR for purchases for 6-14 months and 0%-10.99% for balance transfers for 6-18 months, then variable 14.24% - 25.24%. Cash advance APR variable 27.24%. Pricing as of May 2019 and is subject to change. Call 1-800-DISCOVER or visit Discover.com for details about credit costs & terms.
2 Cashback Match: After the first 12 consecutive billing periods that your new account is open, we will match all of the cash back rewards you’ve earned and apply them to your account in the following one or two billing periods. This promotional offer may not be offered in the future. See Discover.com to learn more.
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KEYWORD: UNITED STATES NORTH AMERICA ILLINOIS
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SOURCE: Discover Financial Services
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PUB: 05/07/2019 04:00 AM/DISC: 05/07/2019 04:01 AM