The credit card industry faces serious financial pressure, much of which results from increasing market competition. Credit card companies have identified interest rare and annual fee as the two attributes upon which most competition is based. While most companies have tried to compete with these two attributes, other non-traditional financial service providers such as Ford Motor Co., GMAC, AT&T, and the major airlines companies have successfully offered consumer incentives for using their card. These incentives range from credit toward the purchase of a new vehicle to free airline miles, free companion air tickets, and cash rebates.

Faced with millions of consumers snatching up these "enhancement rich" credit cards, banks and credit unions are scrambling to make their own products appear more desirable by offering perks such as extended warranty or supplemental insurance programs. However, few credit card providers have stopped to evaluate what consumers value most in their decision to obtain and use a credit card.

Value-added enhancements such as Roadside Assistance or Extended Protection have also been added. Although costly, many credit card companies continue to use these enhancements in an effort to differentiate themselves from other credit cards. Because of the cost of enhancements, it is essential to understand the value the customer places on card enhancements. It is also imperative to understand the value a customer places on standard credit card attributes such as interest rare, billing cycle, annual fee, customer service etc.

Research of Card Attributes
Focus Groups were conducted to determine the attributes most important in obtaining a specific credit card. Low interest rate continues to be the leading factor, with enhancements secondary to critical performance attributes in a credit card. Several of the attributes customers are looking for in credit card are:

· competitive interest rate · fair or no annual fee
· acceptability of card · quality customer service including 800 number
· good overall value for the money · 30 day grace period
· 24 hour card replacement · error free billing

Desired Card Enhancements
While secondary to attributes, value-added enhancements have risen in popularity over the past few years. Certain enhancements are considered to be motivational factors for customers to obtain and use the credit card. The following enhancements are considered very desirable:

· Greater spending power · Purchase protection
· Card registration service · No-fee travelers cheques
· Increase manufacture warranty · Worldwide offices and travel insurance
· Cash Rebates · Rental car insurance including personal injury
· Frequent Flyer Miles

Although they rank below attributes and are expensive, enhancements such as those listed above have shown to be profitable. Companies offering these enhancements continue to carry out national and local advertising, aimed at specific market segments. Enhancements offered by Visa include three of the most desirable: Purchase Protection, Collision Damage Waiver and Extended Protection on warranties.

Desired card enhancements vary depending on purchase habits of the user. For example, users who continues to revolve a balance month after month are particularly interested in long term payment plans, and possible interest charge rebates. They are also interested in a lower interest rate even with a higher annual fee. Users who customarily do not revolve their balance are more interested in terms of a grace period. Heavy users will usually value enhancements such as frequent flyer miles, or cash rebates.

American Express differs from Visa and MasterCard in that many of American Express users seem to be frequent travelers and therefore more interested in travel related values. Discover card users more heavily value cash rebates. Few enhancement value differences exist between Visa and MasterCard users and between regular and gold card holders.

Credit card users in all markets expect reasonable pricing, quality service, and wide market acceptance of their card. Overall, these attributes are more important to users than are enhancements. However, if segmented properly, enhancements can provide enough added value for users to obtain the specific card, and to use that card.

Research Problem
Many people indicate that the card with the lowest interest rate is a major contender when deciding which card to use at the point of purchase. Other factors that encourage card use include lowest minimum payment due each month, cash rebates, extended warranty and purchase protection. Three questions are addressed in this study:

· which attributes do consumers find most attractive in deciding to obtain and use a credit card;

· how does the Cougar credit card program compares with competitors; and

· what marketing strategy would work best for promoting a Cougar Visa card.

Conclusions were drawn primarily from results of a market research survey in which respondents were asked to identify the ten most important attributes for their credit card. These items were then evaluated on a ten point importance scale ranging from Not at all Important to Extremely Important. Next, respondents who had a Cougar Visa card were asked to evaluate their card's performance on these ten attributes. This rating was made using a five point scale ranging from Much Worse than Average to Much Better than Average. Finally, a means-end analysis was conducted. Twenty individuals were interviewed to determine core values in an individual's decision to obtain and use a credit card.

Findings:

The major attributes that customers value most include:
· interest rate
· fees (annual fees, other)
· value added benefits such as frequent flier mileage
· appearance of card (logo or design)
· status symbol such as a gold card
· credit limit
· location of the bank
· ease of attaining the card
· acceptability by vendors and businesses
· customer support / service

The one-on-one interviews identified a list of attributes, consequences, and values. The Laddering interviews helped the respondents to think critically about the connection between credit card attributes and their own personal motivations.

The results of the levels of abstraction Attribute-Consequences-Values, were compiled in a summary table. After plotting each relation, all elements in the map are examined in terms of the numbers of direct and indirect relations they have with other elements, both in terms of other elements leading into them and in terms of their connections to higher order elements. The table presents the sums of the direct and indirect relation for each element. The Quality of Life element has the most elements leading to it. It is viewed as the core value in terms of importance. In addition two other elements have a high frequency of elements leading from them, family and peace of mind. Additionally three others high frequency of elements leading from them as well as into them, financial responsibility, security, and freedom.

The summary table displays the number of connections between the elements. From the summary table, and relations matrix, dominant connections were identified and placed on a hierarchical value map (HVM). The analysis of the HVM and summary tables helped to identify most dominant connections. The most dominant perceptual orientation was Quality of life, with six direct relationships and nine indirect relationships. Next, family related values had five direct relationships and eleven indirect relationships. Peace of mind had four direct relationships and six indirect relationships. Finally, self esteem had three direct relationships and nine indirect relationships.