Tapping Into the African American Financial Market

by Vanessa Loy (BPRW)

Financial services providers that do not attempt to reach African Americans are missing out on a treasure trove in their midst, asserts a recent Marketing Daily story. Marketing Daily reports statistics stating that over two million African American households have incomes of $75,000, and the aggregate income of just the most affluent African Americans is $116 billion. Additionally, the collective purchasing power of African Americans from all income levels is projected to reach $981 billion by 2010.

At the same time, much of the financial services industry has not tapped into this market.
Packaged Facts, a marketing research firm, documents these disparities in their report, "African American Credit, Debit and Prepaid Card Users: Undervalued and Overlooked." Among the findings was the fact that African Americans hold fewer credit cards and use them less often than other ethnic groups, leaving a vacuum to be filled.

The report discovered that other financial services, such as life insurance and student loans, are more frequently used by African Americans. One insurance firm, New York Life, even has a corporate African American Market Unit and has just launched a new online career and resource center at www.newyorklife.com/africanamericancareers.

There are many possible venues for credit card companies to reach this demographic. Since credit card companies often market themselves on college campuses during fall orientation, historically black colleges and universities would be a prime location to engage young adults and their parents on the benefits of responsible credit card ownership. Insurance firms could offer prepaid credit cards as gifts to new policy holders.

As credit card companies vie for profits, giving credit where credit is due to the African American market is the key to coming out on top.