Latino Consumers Drive Paying With Plastic
ROCKVILLE, Md. -- Latino consumers hold the key for issuers of credit, debit and prepaid cards, according to "Consumer Payments in the U.S.: The Latino Market," a report by Packaged Facts.
"The continuing disproportionate growth of the Latino population has made it increasingly important to the American consumer economy. Between 2000 and 2010, aggregate spending by Latinos doubled," said David Sprinkle, publisher of Packaged Facts. "The affluence of Latinos with credit and debit cards and the convenience provided by prepaid cards are generating consistent growth in consumer spending."
According to the report, the number of non-Latino American consumers who owned credit cards decreased by 7 percent between 2004 and 2011. Over the same time span, Latino cardholders increased 23 percent. That increase helped level off the 5-percent decline in the total number of Americans who owned a credit card during the same seven-year period.
All total, more than 14 million Latinos own credit cards, accounting for 10 percent of all consumers who have or use them. In addition, one-third of Latino consumers using credit cards to pay their bills have a household income of $75,000 or more. Projections by Packaged Facts are that the proportion of credit cardholding Latinos will gradually return to pre-recession figures to eventually total 18 million by 2017.
The number of Latinos with debit/ATM cards more than doubled between 2004 and 2011, increasing 115 percent. In contrast, non-Latinos with debit/ATM cards increased only 51 percent. Today, 21 million Latinos own debit/ATM cards, representing 14 percent of consumers of the total. Packaged Facts forecasts the percentage of Latinos with debit/ATM cards will increase until it more closely matches the percentage of non-Latinos with debit cards. By 2017, 26 million Latinos will be debit card owners, it added.
While Latino consumers helped lift credit and debit cards, the report found that they drove the growth in prepaid card use between 2011 and 2012. In addition, nearly five million Latinos used a prepaid credit card in the past 12 months, accounting for 15 percent of all consumers using the cards. Going forward, the convenience and safety factors will contribute to continuing strong growth in Latino use of prepaid cards. Packaged Facts projections are that by 2017 the percentage of Latinos using prepaid cards will increase to 16 percent and that the number of Latinos depending on prepaid cards will exceed six million.