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Fewer Hispanic and African-American consumers have credit cards and bank accounts than do consumers of other ethnicities, according to a report released this week by Synovate, the Chicago-based market-research division of United Kingdom-based Aegis Group PLC. According to Synovate's 2008 U.S. Diversity Markets Report, 69% of respondents who identified themselves in a 2007 telephone survey as African-American and 51% of respondents who identified themselves as Hispanic owned credit cards, whereas 87% of "general market" survey respondents owned credit cards. Synovate defines general market survey respondents as those who did not identify themselves as African-American or Hispanic. Ninety percent of both African-American and general market respondents said they had bank or credit-union accounts (the survey did not distinguish between checking, savings and other types of deposit accounts), while 77% of Hispanic respondents said they had deposit accounts. Elliott Savitzky, a vice president in Synovate's financial-services group, tells CardLine that one reason a higher percentage of African-Americans and Hispanics have less access to credit and participate less in the U.S. banking system is that the incomes for both ethnic groups are lower than average. Other factors also come into play. For example, just 31% of African-American respondents indicated financial institutions treat them well compared with 36% of Hispanic respondents who said so and 41% of general market respondents. Savitsky notes that marketing banking and payment services to underserved portions of the U.S. population will pay off as consumers' financial situations and credit scores improve over time. "Issuers are always going to use credit scores to minimize their risk," Savitsky says. "But if they can market their products in [underserved] communities and provide products and services [consumers] haven't had access to in the past, it's going to pay off."
