Hispanic Population Growth Helps Fuel Financial Services
ROCKVILLE, Md. — New consumer insights have found that Hispanic consumers are becoming more affluent and embracing credit cards at higher rates than before.
The population explosion and increasing affluence of Hispanic consumers is creating growth opportunities for the financial services industry, according to Packaged Facts, and the patterns should continue.
Between 2005 and 2014, the number of Hispanic households with incomes in the $75,000 to $100,000 segment increased more than 50 percent, said Packaged Facts report, Hispanics: Demographic and Consumer Spending Trends.
Hispanics accounted for 39 percent of the growth in the number of households in this income bracket. During the same period, the number of Hispanic households enjoying an income in excess of $100,000 more than doubled.
"Over the past decade, the percent of Hispanic individuals and households using a wide array of financial services has grown faster than it has among non-Hispanic consumers," said David Sprinkle, research director, Packaged Facts. "As a result, Hispanic consumers have become a pillar of growth in the financial services industry."
Millennial Hispanics are of particular importance for marketers of financial services. On average, they are younger than non-Hispanics and account for a greater share of the Hispanic population. Hispanic millennials (those in the 25 to 34 age group) make up 25 percent of the Hispanic population, while non-Hispanics in this age group represent just 16 percent of the non-Hispanic population.
In addition, Hispanic 25- to 34-year-olds account for almost a quarter of Hispanics with checking accounts, while non-Hispanic 25- to 34-year-olds comprise less than 15 percent of non-Hispanics who hold checking accounts.
A similar pattern holds true for credit card users and debit card users, according to the report.
Hispanics' traditional lack of interest in credit cards has changed significantly over the past decade. This is the case among Latino adults across generations, not just millennials.
Packaged Facts found that between 2005 and 2015:
- Growth in credit card use by Latinos grew 11 times faster than it did among non-Hispanics.
- The more than 5 million additional Latinos with credit cards accounted for around half of the growth in the number of consumers using credit cards.
- American Express experienced the greatest relative success among Hispanic consumers over the past decade.