Age and income are the best predictors of a household's use of financial services, but fiscal status determines whether consumers are fee driven or credit driven, according Raddon, a Fiserv Company.

The Lombard, Ill.-based research firm studied six consumer segments, based on age and income.  Four of these are above the median household income, and they traditionally get a lot of focus. "The banking industry in general – spend very little time focusing on the two lower-income segments, which we name the Fee Driven and Low-Income Depositor segments," Andrew Vahrenkamp, Raddon senior research analyst, said. Fee Driven are age 18-44, earning less than $50,000 in income, while Low Income Depositors are 45+, also earning less than $50,000.

Raddon calls the first group "Fee Driven" because the primary way they provide profitability to an institution is through fees, as opposed to their higher-income counterparts, the "Credit Driven" who provide profitability through borrowing.  "Lately, though, the fees have dried up.  Overdraft income is down, interchange income has plateaued.  Since these consumers generally have low loan and deposit balances, they provide little revenue opportunity on the margins."