Recommendations Highly Influence Card Selection, With 73% Citing Impact

A new report from PYMNTS Intelligence, in collaboration with Elan, explores consumer motivations and behaviors behind opening new credit cards, revealing the interplay between financial stability, spending habits and personal recommendations.

Based on a survey of 2,124 U.S. consumers who acquired a new credit card in the past year, the “Consumers’ Financial Health and Spending Priorities Guide Credit Card Choices” provides insights for financial institutions on how consumers select and use credit products today.

Nearly 1 in 3 consumers opened a new credit card this year, with the vast majority already holding at least one card. The report emphasizes that while a consumer’s financial stability heavily influences the type of card they seek — with financially stable individuals often prioritizing rewards and better cash flow management, and financially struggling consumers more likely needing cards for emergency spending or essential costs – this distinction has less impact on their subsequent spending behavior. General-purpose cards were the most common choice overall among those opening new accounts.

Beyond financial position, recommendations from friends and family proved to be exceptionally influential in the card selection process.

The research indicates that most consumers evaluate only one or two credit card options before making a decision, suggesting that the initial touchpoint and perceived trust play a crucial role.

Despite the motivations behind acquiring a new card, ranging from emergency preparedness to seeking rewards, most consumers intend to use their new cards actively, either as their primary card or for specific purchases.

Key findings from the report include:

Recommendations Hold Significant Sway: 73% of consumers who received a credit card recommendation considered it highly influential to their decision.

New Cardholders Are Often Existing Customers: 80% of consumers who opened a new credit card account already had at least one credit card. Financially stable consumers were particularly likely to be repeat cardholders.

General-Purpose Cards Lead Preferences: 66% of consumers who opened a new credit card chose a general-purpose option. While financially stable consumers also preferred general-purpose overall, they were more inclined towards co-branded cards than their struggling counterparts when seeking rewards. Financially struggling consumers strongly favored general-purpose cards, with 75% choosing this option.

The report also sheds light on differences in how consumers manage their new card balances based on their financial health. Financially stable consumers were significantly more likely to pay off all or most of their monthly balance each month on their new cards compared to financially struggling consumers. This pattern holds true when examining how consumers manage the combined balances across all their credit cards.

These distinct payment behaviors highlight ongoing financial pressures faced by less stable consumers and suggest opportunities for issuers to tailor products with features supporting financial literacy and credit improvement for this segment. The report offers actionable insights for financial institutions, including strategies for leveraging recommendations through referral programs and focusing on rewards aligned with everyday spending to ensure cards remain top of wallet.