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.
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