Cardbeat, a research report published by the Auriemma Consulting Group (ACG), was released last week and showed that reward credit card program utilization is at an all-time high. In February 2011 the incidence of credit card rewards programs was only 56 percent, but in February of 2012 it was 62 percent.
The managing director of ACG, Dr. Patricia Sahm, said that 76 percent of research respondents believed that the value of their credit card rewards program had not changed during the last year and 14 percent of them did think the value had increased. Eighty percent of rewards card holder said that they use their rewards card most frequently, even if they carry several different cards.
One question that consumers may have about credit cards is, how easy is it to redeem the rewards? Do people really redeem their cash, points, miles, or other rewards they`ve earned? Mostly, they do. Eighty-two percent of those surveyed said that they have redeemed credit card rewards, and of those people, 93 percent said that they had a positive experience redeeming the rewards.
Some credit card reward redemption processes may be confusing, especially for older people or those who are not tech-savvy. Seniors often don`t know how to redeem rewards online and need assistance to figure out how to get what they`ve earned. However, more and more credit cards are making the redemption process easy and streamlined, so that redeeming rewards is as easy as earning them.
Credit-Land.com editor-in-chief Michael Germanovsky names the Chase Freedom credit card, the United Mileage Plus Explorer card, and the American Express Gold card as this top three picks for rewards credit cards. Why these cards?
The Chase Freedom card gives $100 cash back when you spend $500 in the first three months of having the card, five percent cash back in rotating reward categories, and one percent cash back on all other purchases. “This card gives maximum cash back,” says Germanovsky.
The United Mileage Plus Explorer card gives 25,000 bonus miles just for using your card for the first time, which is enough to redeem for a round-trip domestic ticket on United. Get another 5,000 miles for adding another cardholder to your account in the first two months, and 10,000 bonus miles every year that you spend 25,000 on the card. Germanovsky feels that the annual fee of $95 is worth it for such high rewards, and points out that the fee is waived for the first year.
The American Express Gold Card offers “unmatched rewards” according to Germanovsky. Amex reward points can be used for flights, car rentals, hotel stays, cruises, merchandise, events, gift cards, and many more things. Their rewards program is legendary for giving the best opportunity to earn big rewards and makes the $125 annual fee well worthwhile. Amex, like United Mileage Plus Explorer, waives that fee for the first year.
Transfers Can Be Rewarding
Credit-Land.com will soon be publishing a study detailing the best credit cards offering balance transfer rewards. Many cards now award reward bonuses above and beyond the lower interest rate that a balance transfer offers, giving customers double the reason to transfer a balance. There seem to be more and more ways to earn rewards these days as banks compete for customers, and with rewards card use getting more and more popular, the trend is sure to continue.