Discover Survey Shows Consumers More Satisfied with No Annual Fee Credit Cards
07 May 2019 - 6:00PM
Business Wire
Only 35 percent say they are very satisfied
with their annual fee credit cards; 37 percent report closing a
credit card because of its annual fee
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.
About Discover
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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Media ContactDerek
Cuculich224-405-0665derekcuculich@discover.com@Discover_News
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