Conducted by the global market research company ACNielsen, the survey polled 2,700 consumers aged 18-54 in Beijing, Shanghai and Guangzhou by telephone to compare the behavior and attitudes of different groups of consumers in China. The results unveil the market opportunities that lie in the personal finance sector covering a host of products such as personal banking, credit cards and lendings, life insurance and personal investment, etc.

"Both domestic and foreign banks have been eyeing with great interest the credit card market in China for years -- and for good reason," says Glen Murphy, Managing Director of ACNielsen China. "The vogue of spending tomorrow's money today has caught on in the three key cities, especially among the younger generation, which in turn accelerates the banks' willingness to invest and develop the finance sector."

The study found Guangzhou has the highest credit card penetration, with 25 percent of consumers holding at least one credit or quasi-credit card. Beijing and Shanghai trailed Guangzhou with penetration rates of 23 percent and 21 percent respectively.

The ownership of credit cards was found to be highest among the age group of 25-34, with an average of 35 percent claiming to have held at least one credit or quasi-credit card. Beijing led the market with 39 percent of people in the same age group having a card.

Amidst the keen competition among local and foreign banks to introduce new card products, Peony Card issued by the ICBC was reportedly the most popular, with 13 percent ownership among all card owners. Dragon Card and Great Wall Card followed with an ownership of 9 percent and 6 percent respectively.

Mr Murphy pointed out that the China market had began to transform from a cash to a credit society in the recent decade and the potential for the credit card market continues to unfold as the government relaxes banking regulations for foreign players.

To further develop this market however, banks need to establish a clear product differentiation and value proposition for themselves. This is further evidenced by findings of this survey, which indicate that brand awareness for credit cards is still weak among consumers and they have difficulties in identifying a credit card versus a debit card.

"While it seems elementary, it is important for banks to continue to educate consumers about the privileges and convenience of credit cards in order to increase usage and therefore better capture consumers share of wallet."

The average credit card spending has seen continued growth, partly due to the increasingly affluent consumers and therefore stronger spending power.

The study also showed that other personal finance products are currently at different stages of development. The development of personal loans and personal investment appears to be stagnant. According to the survey, on average, 7 percent of people in the three cities used personal loans in the past 12 months, representing an increase of 1 percentage point over last year, whereas 22 percent of people chose personal investment of various sorts, a drop of 3 percentage points vs. 2003.

"All our figures show that there is still huge potential to be tapped in most personal finance products," Mr Murphy says. "With more money in their pockets, consumers tend to spend more and invest more."

The adjustment in interest rates in recent years might have led to a drop in the usage of bank deposits across the cities. Some 73 percent of people surveyed claimed to have a bank deposit, a 7 percent decline from last year.

On the other hand, life insurance is gaining traction, with 36 percent of consumers in the three cities claiming to purchase it, up 7 percentage point from last year. Propensity of life insurance grew the fastest in Shanghai, with 44 percent of people purchasing, representing an 11 percentage points increase over 2003, followed by Guangzhou with 7 points increase (32% v.s. 25% in 2003). The development of life insurance in Beijing is lagging behind, increasing only 3 percentage points (29% v.s. 26% in last year).

Ping An was reported to be the leading life insurance provider in Beijing and Shanghai, with 11 percent and 20 percent of people as policy holders. In Guangzhou, however, China Life beat Ping An by 4 percent, grabbing a market share of 12 percent.