In recent months, many Americans have tried to be more conscientious in keeping their debt under control, but at the same time, credit cards that grant consumers rewards for every dollar they spend have remained extremely popular among borrowers.
These days, more banks are marketing their own rewards programs instead of branching out and offering them through partners, but this, combined with increasing consumer caution when dealing with credit cards, has not prevented many borrowers from seeking rewards accounts, according to the latest Cardbeat report from the Auriemma Consulting Group. Credit card rewards programs made up 62 percent of all offers in January and February this year, up from 56 percent in February 2011.
The research showed that consumers who use rewards cards do so primarily to earn points, cash back or miles, and are now on the lookout for programs that will reward them most heavily for their purchases, the report said. However, about 76 percent of those polled said that their credit card rewards programs have not changed in the past year, though 14 percent say the account has increased in value. The remaining proportion who felt their cards were now less valuable than before said they thought so because they were earning fewer rewards, and seeing more restrictions placed on the ways they could redeem the points or miles they accrued on the accounts.
Most enjoy being able to redeem rewards
And because the people who have their own rewards accounts saw the ability to earn money from normal credit card spending as the reason for having the card in the first place, four out of five tended to use that account more frequently than others they may have had, the report said. Another possible reason for this is that consumers have largely seen their experiences with their cards as positive. In all, 82 percent have redeemed credit card rewards they've accrued, and 93 percent said the experience was a positive one.
"While a portion of consumers will always be attracted to low-rate cards, the growing popularity of rewards cards is a victory for banks that issue rewards credit cards because it shows that credit card rewards programs resonate with many consumers," said Dr. Patricia Sahm, managing director at ACG.
However, even as lenders more aggressively market these types of accounts, it can still be difficult for some consumers to qualify for them. For this reason, it's important that potential borrowers take the time to order copies of their credit reports. This will help them to find out whether there are any unfair markings having a negative impact on their credit standing. If there are, they may be able to work with a credit repair company to clear up the issues they're facing, and return their ratings to where they should be so that they can better qualify for a more beneficial account.