Why consumers keep their rewards for themselves

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By: Wise Marketer Staff |

Posted on September 12, 2006

A credit card that allows consumers to choose between everyday rewards and special treats, when they want to, is most likely to be at the front of consumer wallets, according to a study by MasterCard Worldwide.

Three-quarters of European consumers (73%) want a credit card that offers rewards, and almost half (48%) admit they would spend the reward points on themselves: nearly twice the number that would give them to a charity or environmental organisation (25%) and more than double the number that would spend them on family and friends (20%).

The findings also indicate a growing preference for luxury rewards, with respondents wanting to treat themselves to discounted city breaks (33%), free cinema, theatre or concert tickets (26%), free spa days (25%), or a special house or garden makeover (24%).

Discounts or cashback
There is still strong demand for financial incentives at traditional retailers which consumers use every day. 65% of those surveyed want a credit card that offers a discount on the price of the purchase they are making at the time, and 57% want cash-back in the form of a percentage of their spend at the end of the year. Supermarkets (41%) and petrol (31%) are the commercial sectors from which consumers most want to collect rewards.

Customisation is key
The findings suggest that customisation of rewards is the key to growing customer preference for co-branded credit cards. Six in ten (59%) respondents said they would be interested in a credit card that offers flexible benefits, allowing them to change the way they use reward points as often as they liked.

The research found that a third of European consumers are attracted to a credit card that demonstrates spending power and prestige (34%), which is most popular among Italians (55%). A third would like their credit card to be linked to a strong retail brand that reflects their personal interests (32%), with the Polish most interested (39%). A quarter of consumers would be attracted by an eye-catching design on the card (24%), with the Polish most likely to be so (37%). Another quarter would like a card they could design themselves (26%), with the Italians most likely to want to (34%).

Travel and fashion
After supermarkets and petrol, the commercial sectors consumers would most like a co-branded card from are travel (24%) and fashion (23%). The Italians are most likely to want a card associated with travel (33%), Germans are most likely to want to link themselves to fashion (32%) and the French are most likely to want a card related to a supermarket (53%) or petrol (41%) brand.

Credit card holders aged 18-24 are more likely than the over-25s to want a co-branded card in the fashion sector, while credit card holders aged 35-44 are most likely to want a supermarket card, perhaps reflecting the priorities of young families.

Aspirational cards
Frederic Conrads, head of co-branding for MasterCard Europe, said: "Brand identity is a major concern for consumers today, so it's no surprise that people want the card in their wallet to reflect their interests and aspirations. Consumers are more likely to use a card that they have an emotional connection to, whether it's linked to a luxury brand or their favourite football club, particularly if that card offers rewards to help maintain or attain a particular lifestyle."

The survey of 1,400 credit card holders was conducted in the UK, Germany, France, Spain, Italy, Russia and Poland in July and August 2006 on behalf of MasterCard by KRC Research, in order to benchmark consumer attitudes to co-branding, ahead of MasterCard's seventh annual Affinity and Co-branding Conference, which was held recently in Valencia, Spain.

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