US consumers are hungry for credit card rewards. Seventy-five percent now have a rewards program attached to their most preferred card, up from 58% two years ago. And with consumer debt practically hitting pre-recession levels, it doesn’t look like anyone’s planning to slow their spending.
Credit card issuers can’t become complacent, however. In fact, now is the time for them to be rethinking their rewards programs; The rush to satisfy consumer card appetite and capture an engaged customer base has saturated the market with lucrative signup bonuses and rewards — and now banks are hurting for returns.
What do consumers value most in a rewards card?
The full report, which cites proprietary consumer survey data, found that 35% of respondents rated the types of rewards offered by their card as the primary determinant in “top-of-wallet” status.
Airline travel, discounted hotels, gift card access, and cash back are among the most popular types of rewards — and understanding what each bank’s customers find most enticing will be critical for card issuers exploring new ways to attract them.
The second most popular rewards feature, cited by 25% of consumers, is a high rewards rate, which could manifest as the amount of rewards earned per dollar spent or the value users can redeem per points earned.
Rewards are even more important for millennials
While those two rewards-related features are the top determinants for card holders across demographics, millennials also selected account opening bonuses as their third most important determinant — driving home the importance of rewards for younger consumers. And since the majority of millennials do not currently have credit cards, this consideration will be critical for issuers looking to convert them.