Consumer Payments in the U.S.: The Latino Market

Aug 27, 2012
124 Pages - Pub ID: LA4868646
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Latino consumers are a bright spot in an otherwise dreary picture for issuers of credit cards.  According to Experian Simmons National Consumer Study (NCS) data, between 2004 and 2011 the total number of American consumers with credit cards dropped 5%, while the number of non-Latinos with credit cards fell 7%.  During this same period, however, the number of Latino cardholders increased 23%.  Thus, the vibrant growth in the number of Latino cardholders helped arrest what would have been an even more significant decline in the total number of American consumers owning credit cards. 

Packaged Facts Consumer Payments in the U.S.: The Latino Market illustrates the importance of Latinos to the debit and prepaid card worlds as well.  Between 2004 and 2011 the number of Latinos with debit/ATM cards more than doubled (115%), while the number of non-Latinos with debit/ATM cards increased only 51%.  Thus the report demonstrates the increasingly crucial role played by Latinos in all aspects of the consumer payments market.

Overview of the Report

The report begins with an analysis of the top trends driving the Latino consumer payments market and shows how Latinos have sparked growth within the credit and debit card industries.  It continues with an overview of Latino consumer payment patterns that includes analyses of how Latinos pay their bills and pay for purchases.  The report continues with a chapter examining trends in Latino consumer spending patterns.  The next chapter explores the use of credit cards by Latinos and includes an overview of the demographic characteristics of Latino cardholders by type of credit card as well as a review of the personal financial management attitudes of Latinos with credit cards.  The following chapter investigates the use of debit cards and prepaid (not gift) cards by Latinos.  The final chapter of the report analyzes the impact of media acculturation on Latino consumer payment practices and highlights regional differences in the Latino consumer payments market.

Scope of the Market

This Packaged Facts report focuses on ownership and use by Latinos of credit cards, debit/ATM cards and prepaid debit (not gift) cards and their payment patterns for bills and purchases.

Methodology

The principal source of primary data is the Winter 2012 Experian Simmons NCS, which was fielded between February 2011 and March 2012.  Trend data contained in the report is constructed from the Fall 2004 through Fall 2011 Experian Simmons National Consumer Studies.  These studies were fielded during the 12-month period ending in December of each year.

Experian Simmons conducts telephone and booklet-based surveys of a large and random sample of consumers who in aggregate represent a statistically accurate cross-section of the U.S. population.  Each Experian Simmons NCS survey release involves a sample of approximately 25,000 respondents.

The report is also based upon data collected from a wide range of industry sources, including company websites, trade publications, business newspapers and magazines, consumer blogs and other releases from public companies.

 

 

Chapter 1: Executive Summary
Background

Introduction

Overview of the Report
Scope and Methodology
Scope of the Market

Methodology
Topline Trends

Latino Market Holds Key to Growth for Issuers of Credit and Debit Cards

Latinos Account for Increasingly Large Share of Users of Credit, Debit and Prepaid Cards

Latinos Represent Bright Spot

Growth in Prepaid Card Use Depends Totally on Latinos

Latino Consumer Spending Surges

Latino Market for Credit Cards Expected to Continue to Grow Rapidly

Number of Latinos with Debit Cards Expected to Grow 22% by 2017

Use of Prepaid Cards Expected to Show Robust Growth
Overview of Latino Consumer Payment Patterns

Access to Credit and Debit Cards Changes Bill Paying Behavior

Latinos as Likely as non-Latinos to Use Debit and Prepaid Cards to Pay Their Bills

More Latinos Pay Bills in Person

Computers and Credit Cards Change Bill Paying Habits of Latinos

Latino Computer Owners less Likely to Use Cash

Demographics of Bill Payment Methods Analyzed

Little Difference in Latino and Non-Latino Consumer Attitudes toward Buying Things with Cash

Latinos Differ from Non-Latinos When Paying for Catalog, Mail/Phone and Internet Purchases
Latino Consumer Spending Patterns

Latinos with Credit Cards More Likely to Be Planning to Buy Big- and Medium-Ticket Items

Cards Lead to More Shopping by Latinos

Credit, Debit and Prepaid Cards Add Up to More Spending by Latino Consumers

Latino Credit Card Holders Outspend Those without Cards

Access to Specialty Store Cards Promotes Spending on Household Furnishings and Bedding, Bath & Linens

Latinos Spend More of Their Income

Many Differences in the Way Latino Consumers Spend Money
Latinos and Credit Cards

14.4 Million Latinos Have Credit Cards

Latinos Most Likely to Carry a Visa Card

American Express Maintains Aura of Exclusivity among Latino Card Holders

Latinos As Likely as Other Amex Card Holders to Use Cards Often

Latinos Share Concerns of Other Consumers about Credit Card Identity Theft

Latino Credit Card Holders More Careful about Spending Money

Latinos with Credit Cards Feel More Financially Secure and Express More Economic Optimism

Consumer Confidence Highest among Latinos with Clothing and Specialty Store Credit Cards

Clear Differences in Demographics of Latino Credit Card Holders

Latinos with Amex Cards Set the Standard for Bank Credit Card Holders

Younger Latinos More Likely to Brandish Clothing and Specialty Store Credit Cards
Latinos and Debit and Prepaid Cards

Debit Cards Much More Common than Credit Cards among Latino Consumers

21 Million Latinos Have Debit/ATM Cards

Visa Dominates among Latinos with Debit Cards

Latinos as Likely as Non-Latinos to Buy Things with Debit/ATM Cards

17% of Latinos Use Debit Cards for Purchases 20+ Times per Month

Latinos More Likely to Use Debit/ATM Cards to Get Cash

Plain Vanilla ATM Cards More Likely to Be Used for Cash than Purchases

Visa Gains among Latinos Making Frequent Use of Debit Cards

Demographics of Latinos with Debit Cards Differ from Those with Credit Cards

4.6 Million Latinos Use Prepaid Cards

Latinos as Likely as Other Consumers to Use Prepaid Cards

Visa Leading Choice of Latino Prepaid Card Users

Demographics of Prepaid Card Users Analyzed
The Impact of Acculturation and Region on Latino Consumer Payment Patterns

Media Acculturation Defined

Acculturation Changes Profile of Latino Consumers

Acculturation Has Major Impact on How Latinos Pay Their Bills

Credit Card Use Tracks with Media Acculturation

Debit Cards Also Related to Acculturation

Miami Latinos Lead in Use of Credit Cards

Methods of Paying Bills Vary Widely across Geographic Regions

 

Chapter 2: Topline Trends
Overview

Latinos Continue to Drive Growth in U.S. Adult Population

Table 2-1:  Growth in Population of Latinos and Non-Latinos 18 Years Old and Over, 2005 vs. 2010

Latino Market Holds Key to Growth for Issuers of Credit and Debit Cards

Table 2-2:  Compound Annual Growth Rates, Number of Latinos and Non-Latinos Who Have or Use Credit Cards and Debit/ATCards, 2004-2011

Latinos Account for Increasingly Large Share of Users of Credit, Debit and Prepaid Cards

Table 2-3:  Number of Latinos with Credit, Debit/ATM and Prepaid Cards
Topline Trends:  Latinos and Credit Cards

More Latinos Carry Credit Cards

Table 2-4:  Number of Latinos and Non-Latinos Who Use/Have Credit Cards, 2004-2011

Latinos Represent Bright Spot for Credit Card Industry

Table 2-5:  Impact of Latinos on Growth in Ownership of Credit Cards, 2004 vs. 2011

Latinos Key Factor in Growth of Frequent Users of Credit Cards

Table 2-6:  Impact of Latinos on Growth in Use of Credit Cards Six or More Times in Last 30 Days, 2004 vs. 2011
Topline Trends:  Latinos and Debit/ATM Cards

Latino Use of Debit/ATM Cards Grows Even Faster Than Credit Card Use

Table 2-7:  Impact of Latinos on Growth in Ownership of Debit/ATM Cards, 2004 vs. 2011

Latino Consumers Important Component in Growing Popularity of Debit and ATM Cards

Table 2-8:  Impact of Latinos on Growth in Frequent Use of Debit/ATM Cards for Purchases in Last 30 Days by Type of Card, 2011 vs. 2012

Table 2-9:  Impact of Latinos on Growth in Use of Debit/ATM Cards for Cash in Last 30 Days, 2011 vs. 2012
Topline Trends:  Latinos and Prepaid Cards

Growth in Prepaid Card Use Depends Totally on Latinos

Table 2-10:  Impact of Latinos on Growth in Use of Prepaid Cards, 2011 vs. 2012

Prepaid Cards Not Necessarily Used by Latinos to Replace Cash or Checking Accounts

Table 2-11:  Percent of Users of Prepaid Cards with and without Checking Accounts, Latino vs. Non-Latino

Marketers of Prepaid Cards Reach Out to Latinos
Other Topline Trends

Latino Consumer Spending Surges

Figure 2-1:  Share of Growth in the Number of Consumer Units 2000 vs. 2010, Latino vs. Non-Latino

Table 2-12:  Trends in Consumer Expenditures of Latino and Other Consumer Units, 2000 vs. 2010

Table 2-13:  Trends in Aggregate Consumer Expenditures of Latino and Other Consumer Units, 2000 vs. 2010

Cards Promote More Shopping and Spending by Latino Consumers

Latino Bill Paying Trends Highlighted

Table 2-14:  Trends in Methods Used by Consumers to Pay Bills 2008-2011, Latino vs. Non-Latino
Size and Growth of the Latino Consumer Payments Market

Latino Market for Credit Cards Expected to Continue to Grow Rapidly

Table 2-15:  Projected Growth in Number of Latino Consumers Who Have or Use Credit Cards, 2012-2017

Number of Latinos with Debit Cards Expected to Grow 22% by 2017

Table 2-16:  Projected Growth in Number of Latino Consumers with Debit/ATM Cards, 2012-2017

Use of Prepaid Cards Expected to Show Robust Growth

Table 2-17:  Projected Growth in Number of Latinos Using Prepaid (not Gift) Cards, 2012-2017

 

Chapter 3: Overview of Latino Consumer Payment Patterns
Paying Bills

Latinos Remain More Likely to Prefer Cash to Pay Bills

Figure 3-1:  Percent Agreeing “I Always Use Cash to Pay Bills, Latinos vs. Non-Latinos

Access to Credit and Debit Cards Changes Bill Paying Behavior

Table 3-1:  Percent Agreeing “I Always Use Cash to Pay Bills” by Ownership of Credit, Debit/ATM and Prepaid Cards, Latinos vs.Non-Latinos

Latinos as Likely as non-Latinos to Use Debit and Prepaid Cards to Pay Their Bills

Table 3-2:  Form of Bill Payment, Latinos vs. Non-Latinos

More Latinos Pay Bills in Person

Table 3-3:  Channel for Paying Bills, Latinos vs. Non-Latinos

Affluence Leads to Changes in Bill Paying Patterns among Latinos

Table 3-4:  Form of Bill Payment by Latinos with Household Income of
$100,000 or More

Affluent Latinos Much Less Likely to Pay Bills in Person

Table 3-5:  Channel of Bill Payment by Latinos with Household Income of b$100,000 or More

Computers and Credit Cards Change Bill Paying Habits of Latinos

Figure 3-2:  Percent of Consumers with Household Computers and Credit Cards Who Pay Bills Online “Always/Sometimes,” Latino vs. Non-Latino

Latino Computer Owners less Likely to Use Cash

Table 3-6:  Form of Bill Payment by Latinos with Credit Card and Computer in Household

Percent Paying Bills in Person Drops Off

Table 3-7:  Channel of Bill Payment by Latinos with Credit Card and Computer in Household

Core Group of Latino Consumers Frequents Paypal.com

Figure 3-3:  Percent of Consumers with Credit Cards and Living in Household with Computer, Visiting Paypal.com in Last 30 Days, Latinos vs. Non-Latinos

Table 3-8:  Number. of Visits to Paypal.com in Last 30 Days by Consumers with Credit Cards and Living in Household with Computer, Latino vs. Non-Latino

Demographics of Bill Payment Methods Analyzed

Table 3-9:  Demographic Profile of Latinos by Method of Paying Bills
Paying for Purchases

Little Difference in Latino and Non-Latino Consumer Attitudes toward Buying Things with Cash

Figure 3-4:  Percent Agreeing “I Often Prefer to Pay Cash for Things I Buy,” Latinos vs. Non-Latinos

Ownership of Credit and Debit Cards Changes Latinos’ Thinking about Paying with Cash

Table 3-10:  Percent Agreeing “I Often Prefer to Pay Cash for Things I Buy” by Ownership of Credit, Debit/ATM and Prepaid Cards, Latinos vs. Non-Latinos

Latinos Choose Credit Cards over Other Methods to Pay for Catalog, Mail/Phone and Internet Purchases but Use Them Less than Non-Latinos Do

Table 3-11:  Usual Method of Payment for Catalog, Mail/Phone and Internet Purchases Made in Last 12 Months, Latinos vs. Non-Latinos

 

Chapter 4: Latino Consumer Spending Patterns
Impact of Credit, Debit and Prepaid Cards on Latino Consumer Shopping and Spending Patterns

Latinos with Credit Cards More Likely to Be Planning to Buy Big- and Medium-Ticket Items

Figure 4-1:  Percent of Latinos with and without Credit Cards Planning to Purchase a Big-Ticket or Medium-Ticket Item in the Next 30 Days

Latinos with American Express Cards Most Likely to Be Leaning toward Big-Ticket Purchase

Table 4-1:  Percent of Latinos with Credit Cards Likely to Buy Big- and Medium-Ticket Items in Next 30 Days by Type of Credit Card

Cards Lead to More Shopping by Latinos

Table 4-2:  Frequency of Shopping by Latinos with Credit, Debit/ATM or Prepaid Cards

Credit, Debit and Prepaid Cards Add Up to More Spending by Latino Consumers

Table 4-3:  Spending Patterns of Latinos with Credit, Debit/ATM or Prepaid Cards

Latino Credit Card Holders Outspend Those without Cards

Table 4-4:  Spending Patterns of Latinos with and without Credit Cards

Access to Specialty Store Cards Promotes Spending on Household Furnishings and Bedding, Bath & Linens

Table 4-5:  Spending Patterns of Latinos by Type of Credit Card Have or Use
Overview of Latino Consumer Expenditure Trends

Consumer Units Defined

Latinos Spend More of Their Income

Table 4-6:  Expenditures of Hispanic Consumer Units as Percent of Before Tax Income, 2010

Latino Consumer Units Analyzed

Table 4-7:  Characteristics of Consumer Units, Latino vs. Non-Latino Consumer Units, 2010

Many Differences in the Way Latino Consumers Spend Money

Table 4-8:  Consumer Expenditure Categories for Which Latino Consumer Units Spend a Higher Percentage of Their Total Budget

Table 4-9:  Consumer Expenditures Categories for Which Latino Consumer Units Spend a Lower Percentage of Their Total Budget

 

Chapter 5: Latinos and Credit Cards
Overview

14.4 Million Latinos Have Credit Cards

Table 5-1:  Number and Percent of Consumers Who Have or Use Credit Cards, Latino vs. Non-Latino

Latinos Most Likely to Carry a Visa Card

Table 5-2:  Type of Credit Card Latinos Have or Use

Sears Card Popular among Latinos

Table 5-3:  Type of Credit Card Have or Use, Latinos vs. Non-Latinos

American Express Maintains Aura of Exclusivity among Latino Card Holders

Table 5-4:  Percent of Latinos Owning Bank Credit Cards and Other Types of Credit Cards

Table 5-5:  Percent of Latinos Owning Retail Store Credit Cards and Other Types of Credit Cards

Latinos As Likely as Other Amex Card Holders to Use Cards Often

Table 5-6:  Number of Times Credit Card Owners Used a Credit Card in Last 30 Days, Latino vs. Non-Latino by Type of Credit Card
Consumer Attitudes

Latinos Share Concerns of Other Consumers about Credit Card Identity Theft

Figure 5-1:  Percent of Credit Card Holders Concerned about Credit Card Identity Theft, Latino vs. Non-Latino

Latino Credit Card Holders More Confident in Money Management Skills

Figure 5-2:  Percent Agreeing ‘I Am Very Good at Managing Money,” Latinos vs. Non-Latinos by Ownership of Credit Cards

Latino Credit Card Holders More Careful about Spending Money

Table 5-7:  Attitudes toward Spending and Saving Money, Latinos vs. Non-Latinos by Ownership of Credit Cards

Latino Credit Card Holders Express Strong Interest in Financial Services

Table 5-8:  Interest in Financial Services of Consumers with and without Credit Cards, Latino vs. Non-Latino

Latinos with Credit Cards Feel More Financially Secure and Express More Economic Optimism

Figure 5-3:  Percent Feeling Financially Secure, Latinos with Credit Cards vs. Latinos without Credit Cards

Figure 5-4:  Measures of Economic Optimism, Latinos with Credit Cards vs. Latinos without Credit Cards

Consumer Confidence Highest among Latinos with Clothing and Specialty Store Credit Cards

Table 5-9:  Measures of Economic Optimism, Latinos with Credit Cards by Type of Credit Card Demographic Profile of Latinos with Credit Cards

Clear Differences in Demographics of Latino Credit Card Holders

Table 5-10:  Demographic Profile of Consumers Who Have or Use Credit Cards, Latino vs Non-Latino.

Latinos with Amex Cards Set the Standard for Bank Credit Card Holders

Table 5-11:  Demographic Profile of Latinos Owning Credit Cards by Type of Credit Card:  Bank Credit Cards

Younger Latinos More Likely to Brandish Clothing and Specialty Store Credit Cards

Table 5-12:  Demographic Profile of Latinos Owning Credit Cards by Type of Credit Card:  Retail Store Credit Cards

 

Chapter 6: Latinos and Debit and Prepaid Cards
Debit Cards

Debit Cards Much More Common than Credit Cards among Latino Consumers

Figure 6-1:  Percent with Debit and Credit Cards, Latinos vs. Non-Latinos

21 Million Latinos Have Debit/ATM Cards

Table 6-1:  Number and Percent of Consumers Who Have Debit/ATM Cards, Latino vs. Non-Latino

Visa Dominates among Latinos with Debit Cards

Table 6-2:  Type of Debit/ATM Card Latinos Have

Table 6-3:  Percent Having or Using Debit/ATM Card, Latinos vs. Non-Latinos

Latinos as Likely as Non-Latinos to Buy Things with Debit/ATM Cards

Figure 6-2:  Percent Using Debit or ATM Card for Purchases in Last 30 Days, Latinos vs. Non-Latinos

17% of Latinos Use Debit Cards for Purchases 20+ Times per Month

Table 6-4:  Number of Times Owners of Debit/ATM Cards Used for Purchases in Last 30 days by Type of Card, Latinos vs. Non-Latinos

Latinos More Likely to Use Debit/ATM Cards to Get Cash

Figure 6-3:  Percent Using Debit or ATM Card for Cash in Last 30 Days, Latinos vs. Non-Latinos

Table 6-5:  Number of Times Owners of Debit/ATM Cards Used Card for Cash in Last 30 days by Type of Card, Latinos vs. Non-Latinos

Plain Vanilla ATM Cards More Likely to Be Used for Cash than Purchases

Figure 6-4:  Use of Debit/ATM Cards without Visa or MasterCard Logo for Purchases and Getting Cash, Latinos vs. Non-Latinos

Visa Gains among Latinos Making Frequent Use of Debit Cards

Table 6-6:  Number and Percent of Latinos Using Debit/ATM Cards for Cash Six or More Times in Last 30 Days by Type of Card, 2011 vs. 2012

Table 6-7:  Number and Percent of Consumers Using Debit/ATM Cards for Purchases Six or  More Times in Last 30 Days by Type of Card, 2011 vs. 2012

Demographics of Latinos with Debit Cards Differ from Those with Credit Cards

Table 6-8:  Demographic Profile of Latinos with Debit/ATM Cards Only, Both Credit and Debit Cards and Credit Cards Onl
Prepaid Cards

4.6 Million Latinos Use Prepaid Cards

Table 6-9:  Number and Percent of Consumers Who Used Prepaid (not Gift) Cards in Last12 Months, Latino vs. Non-Latino

Latinos as Likely as Other Consumers to Use Prepaid Cards

Figure 6-5:  Percent Using Prepaid Cards in Last 12 Months, Latinos vs. Non-Latinos

Visa Leading Choice of Latino Prepaid Card Users

Table 6-10:  Type of Prepaid Card Used in Last 12 Months by Latinos

Table 6-11:  Percent Using Prepaid Cards (Not Gift Cards) by Brand of Card, Latinos vs. Non-Latinos

Demographics of Prepaid Card Users Analyzed

Table 6-12:  Demographic Profile of Consumers Using Prepaid Cards, Latino vs. Non-Latino

 

Chapter 7: The Impact of Acculturation and Region on Latino Consumer Payment Patterns
The Changing Profile of Latino Consumers

Nearly Half of Latino Adults Born in the U.S.

Figure 7-1:  Components of Latino Population Growth 2004-2011, Immigration vs. Natural Increase

Table 7-1:  Native vs. Foreign-Born Latinos 18 Years Old and Over, 2010

More than Half Are Fully Bilingual or Speak Only English at Home

Table 7-2:  English-Language Capabilities of Latinos 18 Years Old and Over, 2010
The Impact of Media Acculturation on Latino Consumer Payment Patterns

Media Acculturation Defined

Acculturation Changes Profile of Latino Consumers

Table 7-3:  Demographic Profile of Latinos by Degree of Media Acculturation

Acculturation Has Major Impact on How Latinos Pay Their Bills

Table 7-4:  Channels Latinos Use to Pay Bills by Degree of Media Acculturation

Table 7-5:  Forms Latinos Use to Pay Bills by Degree of Media Acculturation

Credit Card Use Tracks with Media Acculturation

Figure 7-2:  Percent of Latinos with Credit Cards by Degree of Media Acculturation

Table 7-6: Number of Times Latinos Used a Credit Card in the Last 30 Days by Degree of Media Acculturation

Media Acculturated Latinos with Credit Cards Represent Significant Opportunity

Table 7-7:  Demographic Highlights of Latinos Owning Credit Cards and Having a High Degree of Media Acculturation

Debit Cards Also Related to Acculturation

Figure 7-3:  Percent of Latinos with Debit/ATM Cards by Degree of Media Acculturation
Regional Differences in Latino Consumer Payment Patterns

Many Regional Differences in Latino Demographics

Table 7-8:  Demographic Characteristics of Latinos by Selected Geographic Area

Miami Latinos Lead in Use of Credit Cards

Table 7-9:  Percent of Latinos with Credit, Debit/ATM or Prepaid Cards by Selected Geographic Area

Methods of Paying Bills Vary Widely across Geographic Regions

Table 7-10:  Methods Latinos Use to Pay Bills by Selected Geographic Area

 

Appendix: Addresses of Selected U.S. Latino Market Resources

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