In recent years, Latino consumers have generated exceptional growth opportunities for the financial services industry. Because of projected above-average growth in the number of Latino consumers and an expanding base of middle- and higher-income Hispanic households, these patterns are likely to continue, according to a Packaged Facts report titled “Hispanics: Demographic and Consumer Spending Trends.”
“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,” says David Sprinkle, research director at Packaged Facts. “As a result, Hispanic consumers have become a pillar of growth in the financial services industry.”
Between 2005 and 2014, the number of Latino households with an income between $75,000 and $100,000 increased more than 50%, and Latinos accounted for 39% 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.
Millennial Latinos in particular have an outsized importance for marketers of financial services, mainly because Hispanics on average are younger than non-Hispanics, and thus Millennials account for a greater share of the Hispanic population.
Hispanic Millennials (25- to 34-year-old) make up 25% of the Hispanic population, while non-Hispanics in this age group represent just 16% of the non-Hispanic population. They account for almost a quarter of Hispanics with checking accounts, while non-Hispanic Millennials comprise less than 15% of non-Hispanic checking account owners. A similar pattern holds true for credit card users and debit card users.
The traditional lack of interest on the part of Hispanics in credit cards has changed significantly over the past decade. This is true of Latino adults across generations, not just Millennials.
Packaged Facts found that between 2005 and 2015: The percent of Latinos using credit cards increased as the percent of non-Hispanics with credit cards fell. Also, growth in credit card use by Latinos grew 11 times faster than it did among non-Hispanics. Hispanics grew from 8% to 11% of those using credit cards. The more than 5 million additional Latinos with credit cards accounted for about half of the growth in the number of consumers using credit cards, and American Express experienced the greatest relative success among Hispanic consumers over the past decade.