Rewards credit card ownership increases
New research reveals a marked increase in the number of UK consumers turning to credit cards that offer rewards, as Britons seek ways to make their money work harder.
Annual consumer research by American Express Credit Cards shows a 32 per cent uplift in reward card ownership in the last year.
While reward card ownership has increased since 2011 levels, more than half (52 per cent) of UK adults are still missing out on potential rewards - including cashback, retail vouchers and travel rewards - to the tune of £3 billion per year by using other payment methods such as debit cards, non-rewards credit cards and cash.
Britain's continued austerity drive in 2012 is having an impact on consumer spending behaviour, with almost half of rewards credit card holders (48 per cent) more likely to deliberately shop at particular stores and buy specific products to earn rewards.
According to the research, there has been a slight shift year-on-year in the choice of rewards collected. In 2011, retail vouchers were most popular with rewards credit cardholders (preferred by 37 per cent) followed by cashback (35 per cent). This year's research shows an uplift in popularity of cashback, marginally over-taking retail vouchers (38 per cent versus 33 per cent).
Almost half (46 per cent) of rewards credit card holders revealed they are more likely to use their points now than a year ago, with 86 per cent redeeming their points at least once a year compared to 78 per cent in 2011. They are gaining more financially too: on average, rewards cardholders estimate their rewards are worth on average £123 a year up from £116 in 2011.
Julie Hay, Head of Credit Cards at American Express, said: "People are embracing ways of earning rewards to make savings from their everyday spending and we're seeing that consumers are voting with their wallets even more so than this time last year. Rewards cards are not only growing in popularity, they are also influencing where consumers are choosing to shop."
Previously, rewards credit cardholders were most likely to redeem their rewards for occasional treats (27 per cent in 2011). While this remains popular with a quarter of reward cardholders, the research also shows rewards are being used to boost everyday spending power (29 per cent) and help towards everyday living costs (20 per cent).
Julie Hay added: Consumers are increasingly savvier with their spending and what they expect to receive in return for their choice of payment methods. Putting everyday spend as well as bigger ticket items on the right card can pay dividends. Whether you prefer to receive cashback, earn points towards flights, or receive travel, shopping or entertainment rewards, there has never been a better time to say goodbye to ‘Passive Plastic' and use a credit card that actively rewards you for your spending."
Key features of the American Express Platinum Cashback Credit Card:
5 per cent introductory rate on up to £2,000 of purchases in your first three months
1.25 per cent on-going rate
2.5 per cent (double the ongoing rate) during the Card anniversary month every year if purchases in excess of £10,000 have been made in the preceding 12 months
No minimum or maximum limit on the amounts of cashback that can be earned (after the first three months)
Interest rate for purchases: 14.0% p.a. variable. Representative 18.5% APR variable (based on annual fee of £25 and assumed credit limit of £1200).
For more information or to apply for an American Express Credit Card, visit americanexpress.com/uk.