Though conventional wisdom says that people with larger incomes make better credit card customers, Stephen M. Szekely, a market researcher, has warned issuers not to overlook people with moderate incomes.

Mr. Szekely, vice president of Payment Systems Inc. of Tampa, Fla., addressed a small group of bankers in New York City last week, and divulged preliminary research about cardholder behavior that his firm is preparing.

"It is easy for issuers to fall into the trap of targeting people with a certain minimum income" and lose potential customers who don't meet the criteria, he said.

Some of findings confirm traditional assumptions about the industry. For example, the research shows that transaction volume rises with one's income, heavy spenders are generally affluent, and outstanding balances decline with age.

However, the research also revealed that the largest concentration of balances - or 30% of all credit card debt - belongs to people who have incomes between $35,000 and $75,000 and are between the ages of 35 and 40.

A strong income is good, said Mr. Szekely, "but more is not necessarily better once you get beyond the point of a comfortable living."

Moreover, upper-income households, defined as those with an annual income of more than $75,000, with the primary card user under age 60, are twice as likely to be chronic convenience users as are moderate-to-low- income households with incomes under $75,000.

While people between the ages of 30 to 49 with incomes between $35,000 and $75,000 continue to be card issuers' most profitable customers, Mr. Szekely pointed to a younger generation with lower incomes as the future of the card business.

The latter group is between 30 and 39 years old with an annual income between $25,000 and $34,000. It also maintains a monthly balance that is 33% higher than the average industry balance.

"A lot of people in that group under age 40 are going to be good customers for a long time," concluded Mr. Szekely, "so the younger people might be the best targets."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.