While over 50% of respondents in a survey of American consumers reported having at least one or two rewards credit cards, more than 41% either rarely or never bother to use their rewards, according to GMAC Mortgage, which has also recently launched its own Equity Rewards MasterCard.
The survey, conducted by Harris Interactive and sponsored by GMAC Mortgage, indicated that traditional rewards programmes, such as airline miles, are losing popularity with consumers, as only 13% of all respondents in the survey ranked airline miles as being "valuable" to them.
According to Mike Piazza, vice president for GMAC Mortgage, "Many consumers have reward cards, but the value of those cards is reduced when it comes to redeeming their rewards points. There is a lot of hassle value associated with trying to redeem miles or points."
Make redemption easier
The survey also found that nearly one in four rewards cardholders would use their rewards more often if it were easier to redeem their points. Seven percent of the rewards cardholders categorized the value of their credit card rewards as worthless and do not bother with them.
The recent launch of the GMAC Mortgage Equity Rewards MasterCard (available only to mortgage customers) presents an example of a credit card-based rewards programme that gives consumers a new option: allowing cardholders to pay toward their mortgage with each qualifying retail purchase using the card.
Points for mortgage payments
Cardholders earn 1 point for every US$1 in retail spending charged to the card. When they accumulate 2,500 points, they receive an automatic principal reduction of US$25 on their GMAC mortgage. There are no restrictions on the number of points that can be earned and redeemed each year. Points are redeemed automatically, and rewards are applied once a quarter.