Financially Stable Consumers Favor Co-Branded Cards for Rewards

Higher costs and economic uncertainty are pushing consumers to rethink their credit card choices. A recent PYMNTS Intelligence report, Consumers’ Financial Health and Spending Priorities Guide Credit Card Choices, reveals that financial stability significantly influences card selection, with rewards and credit-building playing key roles.

General-Purpose vs. Co-Branded Cards

The report found that 66% of consumers opened general-purpose credit cards in the past year, making them the most common choice. However, financially stable consumers were more likely to opt for co-branded cards, with 75% preferring them for their rewards and benefits. In contrast, only 39% of financially struggling consumers chose co-branded cards, indicating a preference for flexible spending options.

The Power of Recommendations

Personal recommendations play a crucial role in credit card selection. The study found that 73% of consumers considered recommendations from friends or family highly influential. This was particularly true for financially stable individuals (75%) compared to those struggling financially (68%).

Spending Behavior Remains Consistent

Despite different motivations for opening a new card, spending behavior remained steady across financial groups. On average, consumers spent around $1,700 on rewards-based cards. Emergency-related spending showed minimal variation, with financially stable consumers averaging $1,974 and struggling consumers at $1,824.

Insights for Card Issuers

Financial health impacts credit card preferences, but spending patterns remain consistent. While financially stable individuals prioritize rewards and co-branded options, those facing financial challenges lean toward general-purpose cards. Understanding these trends can help issuers tailor their offerings to meet consumer needs effectively.