Consumers want the credit option, study says.
More than 5 percent of all recurring bills - like phone, magazine and insurance bills - are paid with a credit card (see Chart 1), according to a study conducted by Market Facts Inc. for Visa U.S.A. Yet less than one-half of 1 percent of consumers pull out their plastic to pay utility bills (see Chart 3).
Here's one likely reason: Only 8 percent of all utilities accept credit card payments (see Chart 2). Utilities may want to reconsider their offerings, however. More than a third of the consumers surveyed said they'd like to have the option of using credit cards. That includes 33 percent of electric customers. (About 24 percent of utilities are considering accepting credit card payments.)
If utilities should ever decide to offer the credit option, then they should probably focus on the male college graduate with a full-time job that pays more than $50,000 and who lives in a 2-million-plus metro area in the Mid-Atlantic, Mountain or Pacific region. According to the survey, this type of customer was most interested in paying on credit.p>Of nine merchant categories examined by Custom Research Inc. in another study conducted for Visa U.S.A., the gas-electric-water utility category appeared to offer the greatest long-term potential for credit card use. Of all bills consumers pay to a utility, 87 percent are paid regularly. At an average of $154 million, the annual sales volumes reported by utilities are much larger than any other merchant category examined. Categories examined included: Phone; cellular phone; periodicals; newspapers; equipment; memberships; cable TV; and insurance. Annual sales for those categories ranged from $4 million to $61 million.