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Consumers “heart” their rewards credit cards

by Peter Andrew
Consumers “heart” their rewards credit cards

Capital One recently released its July-September quarterly credit card Rewards Barometer. It’s based on a poll of more than 1,000 Americans who have rewards credit cards, and represents all rewards card holders, not just those of Capital One.

Rewards credit cards satisfaction improves

The number of respondents who ranked their rewards programs “excellent” rose across three criteria between the first and third quarters of this year:

  • Thirty-two percent said the rewards-related customer service they received from their credit card companies was excellent, up from 25 percent six months ago.
  • An even greater rise in excellence ratings (8.7 percentage points) was seen in the “flexibility of redemption options” category.
  • More consumers (up 6.3 percentage points) rated their “ability to earn rewards quickly” as excellent.

Why the change?

Capital One suggests that low consumer confidence in the economy might be behind these shifts. It quoted data from the Conference Board that showed this “recently plunging to 44.5 from 59.2 in July.”

Even more telling may be a study published last week by Sentier Research. The study found that real median annual household income has plummeted in the U.S. over the last few years. It stood at $49,909 in June 2011, down from $55,309 in December 2007.

With all that plunging and plummeting going on, it’s no real surprise that consumers are counting every cent, and valuing even more the benefits they can derive from their rewards credit cards.

Travel rewards cards could be more flexible

In general, respondents reported being happier with their rewards programs, with 23.9 percent telling Capital One’s research company in late August that they were “completely satisfied” with theirs. That was up from 21.7 percent in the first quarter.

However, those with travel rewards cards still have some major gripes. They cited two factors that prevented them from redeeming travel rewards:

  • Blackout dates (25.8 percent)
  • Can’t make last-minute bookings (22.5 percent)

These restrictions are spelled out in each card’s terms and conditions, which can vary considerably from card to card.

Rewards credit cards and redemptions

Many consumers already have plans for the rewards they’re earning. More than a quarter of those with cash back credit cards are saving at least some of theirs for shopping this holiday season, significantly more than the number who are saving for more strategic events such as retirement (13 percent) and college (5.6 percent).

Whether they have cash back credit cards or earn points, an astonishing 54.9 percent of those intending to redeem rewards for holiday gift purchases are planning to buy gift cards. At this rate, those mounds of beautifully wrapped boxes we’re used to seeing under Christmas trees could soon be replaced by neat piles of envelopes.

Is it too soon to wish you a Happy Holiday? Thought so.

Disclaimer:The information in this article is believed to be accurate as of the date it was written. Please keep in mind that credit card offers change frequently. Therefore, we cannot guarantee the accuracy of the information in this article. Reasonable efforts are made to maintain accurate information. See the online credit card application for full terms and conditions on offers and rewards. Please verify all terms and conditions of any credit card prior to applying.

This content is not provided by any company mentioned in this article. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any such company. CardRatings.com does not review every company or every offer available on the market.

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