Why People Prefer Credit Cards with an Annual Fee: Discover Survey
Recently Discover shared results of their new online survey. The survey was conducted from February 12 to 17 by research company Dynata on behalf of Discover Financial Services. 1500 adult respondents of different ages from the U.S. took part in it. Among them, there were 96 post-millennials (18-21 years old), 421 millennials (22-36 years old), 461 Gen X (37-52 years old), 393 baby boomers (53-71 years old), and 129 pre-boomers (72+ years old). The study came to some interesting conclusions that are listed below.
- Most applicants tend to choose credit cards with no annual fee.
- An annual fee is a common reason for canceling credit cards.
- Older generations aim to stay away from an annual fee.
- Younger generations don’t mind trying annual fee credit cards.
- Rewards make applicants prefer credit cards with an annual fee.
66% of respondents admitted having their choice of a credit card affected by an annual fee and 60% consider an annual fee being an important factor when choosing a card. 70% called themselves “very satisfied” with their credit cards with a $0 annual fee. However, 35% mentioned they’re not less satisfied with their annual fee credit cards.
The research shows that the intention of the majority (54%) of those who want to change a credit card is explained by their desire to get rid of the annual fee. And 37% have already closed a credit card due to it.
The older cardholders are, the more often they want to switch to a new credit card in order to avoid the annual fee. 78% of pre-boomers, 67% of baby boomers, 58% of Gen X and only 46% of millennials and 41% of post-millennials confirmed they had such thoughts.
On the contrary, the younger applicants are, the more likely they are to have an experience of a card with an annual fee using. 59% of post-millennials, 52% of millennials, 47% of Gen X, 43% of pre-boomers and 41% of baby boomers picked cards with an annual fee.
According to the survey, the two main reasons why people apply for credit cards with an annual fee are cashback rewards (52%) and travel benefits or rewards (48%).
Nevertheless, it doesn’t mean that all credit cards with no annual fee are not competitive. Some of them can also be worthwhile and even have better bonuses. These are not just words. To make sure, look at Discover credit cards with $0 annual fee. All of them come with a comparable to none sign-up bonus for new cardmembers: at the end of the first year, Discover matches all the rewards you’ve earned. You don’t even need to fulfill any conditions like spending a particular amount in a limited time period.
Moreover, Discover rewards programs can beat all rivals. For example, you can earn up to 5% cash back at different places each quarter up to the quarterly maximum after activation with the Discover it® Cash Back, the Discover it® Balance Transfer and the NHL® Discover it® credit cards as well as unlimited 1.5x miles with the Discover it® Miles card and extra student perks with Discover it® Student Cash Back and the Discover it® Student chrome cards. Not to mention favorable APRs on all cards.
Latest Credit Card Fees News
Do you own a credit card with a variable APR? If so, in case you attentively read your monthly statements, you probably noticed slight changes in interest rates last time. But in case you noticed no difference yet but have already managed to get upset after reading the previous sentence, take it easy! The changes play into your hands since the rates have dropped!
Using credit cards, we constantly have to encounter different kinds of fees. So, during the 2019 U.S. News Consumer Credit Card Fee Study, hundreds of credit cards were examined in order to investigate annual fees, cash advance fees, foreign transaction fees, late and returned payment fees, and balance transfer fees more closely.
There are four major credit card networks: Visa, Mastercard, Discover and American Express. These 4 networks differ basically in two things: how and where the person owning the card can use it and the benefits the network offers.
More and more people are figuring out that the best way to avoid credit card fees and unnecessary bank charges is to use a prepaid card—otherwise known as a general-purpose reloadable prepaid card. These cards are increasingly popular among all demographics, including Millennials, small business owners, and people who are self-employed.
Good news for entrepreneurs and small business owners: there’s a new rewards credit card that gives unlimited cash back and has no annual fee.