Dr. Mary Ann Campbell, CFP® = "Dr. MAC"

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Reward Credit Card Trends

Thursday, June 23rd, 2011

Capital One released their survey results today on how consumers accrue and redeem credit card rewards.  Their findings reveal usage trends for summer travel.  Here are some of the highlights of their survey:

  • Only 24 percent of consumers are completely satisfied with their current program.
  • More than 40 percent of survey respondents plan on using their credit card rewards for summer travel in 2011. 
  • For those who plan to use credit card rewards to supplement their summer vacation, the most popular rewards redemption options were rewards were hotels (55 percent), air travel (48 percent) and gas (42 percent).
  • Nearly 60 percent of those surveyed are unsure as to whether they would be charged foreign transaction fees
  • “Free money” continues to be the number one motivation for consumers to earn and use credit card rewards (61 percent). 33 percent of respondents appreciate the everyday savings provided by rewards programs.
  • 48 percent of survey respondents reported gas costs will influence their summer travel plans. 
  • Blackout dates (26 percent) and inability to book a last minute trip (24 percent) continue to be the main barriers preventing consumers who wanted to redeem rewards for travel but couldn’t.

The research was taken among U.S. adults who indicated they currently have a credit card with a rewards program.  BIGresearch® conducted the survey from May 31-June 8, 2011.

It doesn’t surprise me that cash back shows up as the number one motivator for consumers.  Credit card companies incentivize spending with cash back so that the people who spend the most will want to spend more.  In today’s economy, if you have it, spending it can create more jobs for people who don’t. 

IndexCreditCards.com allows you to search for the top reward cards via category by using the drop boxes in their rewards card section.  Chase Freedom® Visa with $150 bonus cash back leads the pack with Discover® More® Card and Capital One® No Hassle Cash(sm) Rewards close behind. 

Capital One offers the following tips on how to maximize your reward cards this summer:

  1. Follow your travel habits: If your travel patterns – such as hotel or airline – vary from trip to trip, a credit card that is not linked with a specific brand may be an optimal choice.
  1. Don’t let your vacation expire: Rewards programs differ, so read the fine print to make sure you redeem for your vacation before you lose those hard earned rewards.
  2. Account for extra fees: Additional charges such as fuel surcharges, baggage fees and foreign transaction fees can add up, so take those costs into consideration when budgeting. Also investigate whether your credit card rewards program allows you to use rewards to cover these costs.

Happy Rewards!

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