Britons still keen on credit card rewards

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By: Wise Marketer Staff |

Posted on December 16, 2009

Consumers are keen to make use of their credit cards' loyalty rewards, with 54% of cardholders claiming all or a large part of the benefits they had earned in 2008 - up from only 23% in 2008 - according to a report by Financial Facts.

The report examined the difference between consumer membership of supermarket loyalty programmes and rewards-based credit cards, with the aim of discovering whether or not rewards credit cards can keep up with trusted supermarket brands in terms of consumer engagement and participation.

According to the report, one out of four Britons (25%) are members of Tesco's Clubcard loyalty programme, with rival supermarkets Sainsbury's and Asda also offering various rewards and benefits.

Thanks to the recession, consumers are understandably drawn to money-saving or value-adding offers from supermarkets and other retailers, particularly while credit card issuers are not yet taking full advantage of consumer demand for these programmes. (A study by Sainsbury's Finance in August 2009 found that the proportion of UK credit cards offering a reward had declined by 11% since 2008.)

Financial Facts reports that only 10% of Tesco Clubcard holders currently also have a Tesco credit card, although a rapid expansion appears to be underway. There are currently six in-store Tesco bank branches, with approximately 500,000 customers having savings accounts (with a combined savings balance of some 4.6 billion - and that total is steadily rising).

However, many credit card companies in the US, such as Bank of America, offer similar rewards credit cards that offer good value with less risk, and these cards typically cover a wider range of stores at which consumers can benefit from using their cards.

But many British consumers are still reluctant to trust anyone other than a traditional bank with their money. According to ASDA official, Gideon Ingram, "Brands that consumers know and trust can provide customers with the same, if not better, service than banks. Just because we offer the same products as banks doesn't mean we have to behave like them."

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