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Credit card reward schemes dropping

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by David Masters

The number of credit cards offering rewards to consumers has fallen by 11% in the past 12 months, research by Sainsbury’s Finance has discovered.

In 2008, 78% of credit cards on the market offered a rewards scheme.

This figure has now dropped to 11%.

The rewards on offer have also changed, Sainsbury’s found, with air miles and loyalty points replacing cashback deals and shopping vouchers.

Over half (54%) of customers are cashing in their credit cards rewards, compared with just 23% a year ago.

Credit card holders who fail to redeem their rewards say its because the financial incentive is too low, or the redemption process is too complicated.

“The recession has made a lot of people reassess their finances and it’s great to see that people are starting to make the most of the rewards on offer via their credit cards,” said Craig Hunter of Sainsbury’s Credit Cards.

“The credit card industry still has a lot of work to do however, as 46 per cent of people still say that they haven’t reclaimed the rewards they’ve earned in the past year, often because of their view of the scheme they have.

“There is no point offering reward schemes if there is no perceived value or if it is too difficult to redeem the rewards.”

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News posted: August 14, 2009

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