RealTime IT News

Report: Online Credit Card Seekers Carry More Debt

Online credit card seekers carry more debt, are more ethnically diverse and more receptive to online branding than the general online population, according to a new study.

Online credit card seekers are also younger, primarily male, and more likely to carry larger balances than other segments such as online traders, the study from Cyber Dialogue, an Internet customer relationship management company, found. Already, 9.8 million Americans have shopped for credit cards through the Internet.

Online credit card seekers are especially attractive because nearly half of them (4.3 million) have applied for a credit card directly online, potentially reducing the cost of acquisition to online credit card issuers Cyber Dialogue said.

Online credit card applicants also have a particularly high conversion rate, as more than half of those who applied on the Web (2.2 million) ultimately acquired and began actively using the credit card they obtained online.

The survey found that 35 percent of online credit card seekers are in the ethnic minority, in comparison to 20 percent of the general online adult population. Credit card seekers carry an average balance of more than $3,100, nearly $1,000 more than the general online population.

"Credit card companies are missing an opportunity to acquire potentially valuable lifetime customers by overlooking such largely untapped groups as ethnic minorities," said Sam Callard, a financial analyst for Cyber Dialogue's Internet Strategies Group.

"One of the great benefits of the Internet is its ability to reduce the cost and risk of one-to-one targeting of these kinds of small, high-potential customer segments."

The survey also found that credit card seekers are more demanding credit card customers than the general online population. They are especially concerned about low interest rates and the reputation of the credit card company. Ninety percent of online credit card seekers list low interest rates as an important feature of a card and 83 percent list a trusted institution.

The general online population is a third less likely to cite these two factors as important.