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    Candor, Innovation Keys to Sustaining Growth of Rewards Cards: Study

    A key to skirting potential recession repercussions for rewards card issuers is candidness, according to market research firm Packaged Facts' new report, "The U.S. Market for Rewards Cards, 2nd Edition."

    A key to skirting potential recession repercussions for rewards card issuers is candidness, according to market research firm Packaged Facts' new report, "The U.S. Market for Rewards Cards, 2nd Edition."

    Clearing away the fog surrounding rewards card offers is essential for maintaining loyalty with current rewards cardholders and cultivating trust with potential card owners - especially with the stigma financial institutions face after the recent bank failings, said the Packaged Facts study.

    "The critical issue in the current consumer rewards cards relationship is one of transparency," said Tatjana Meerman, publisher of Packaged Facts. "More consumers are hyper aware of unsavory credit-related business practices, be they real or imagined. And they want to know with whom they are dealing, what their values are, and to what degree they can be trusted,"

    According to the study, the reward card market saw robust growth between 2003-2007, with the purchase volume of the four main general-purpose credit brands (Visa, MasterCard, American Express, and Discover) increasing at a compound annual growth rate (CAGR) of 10 percent to over $1.9 trillion.

    However, it's still uncertain how the current economic environment and the trepidation it breeds among consumers will impact the market for the future.

    For some issuers, the economic upheaval has spurred innovation, said the report. Credit card companies are responding to consumer woes by offering new cards with revamped rewards programs aimed at alleviating financial stress with novel benefits. In the past, rewards card have been about "spending to spend more." The new cards allow consumers to spend and save at the same time.

    For example, some cards motivate consumers to make payments on time by awarding lower interest rates to financially responsible cardholders, according to Packaged Facts. The new rewards cards also enable customers to select their Annual Percentage Rate (APR) based on their monthly payment.

    The study contains data and analysis on the general-purpose credit card industry in the U.S., with a focus on rewards-based programs and cards, including the size and growth of the market and several related metrics within the broader credit card arena, as well as trends and factors affecting the industry. The full report is available for purchase at: http://www.packagedfacts.com/Rewards-Cards-1391122/.

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