Study Reveals Relationship Between Consumer Trust and Credit Card Use

Javelin Strategy and Research recently released a study entitled “The Importance of Consumer Trust on FI Profitability” which attempts to measure the relationship between consumer confidence and credit card spending. 

The study, conducted in 2008 using a random sample of 2,339 online respondents representative of gender, age, and income levels of US online shoppers, asked a series of questions designed to ascertain the level of trust these consumers have in their financial institutions and how that relates to their spending levels. 

One of the key findings is that of the consumers who feel more trust in financial services companies, 19% indicated increased credit card spending over a 90 day period (26% decreased credit card spending). On the other hand, of those who feel less trust in financial services companies, only 9% increased credit card usage (and 50% decreased credit card usage).

It’s not particularly surprising that those who trust their financial institutions are more likely to use them. Can you think of a single relationship in your own life, personal or professional, which isn’t built on trust? Especially in times like this, when fraud is on the rise, trusting the wrong entity could have grave consequences. It’s also important to note that the study took place in September 2008 as the financial crisis was in its early stages.

The general weakness of today’s economy coupled with widespread fraud and uncertainty must certainly affect consumer spending and saving habits.  Only those financial institutions that can build and maintain consumer trust through continued transparent and ethical business practices coupled with strong brand protection strategies will continue to flourish in times like this.