Cash Back The Most Popular Reward Credit Card

As loyalty reward credit cards continue to outstrip 0% interest cards in the popularity stakes, it is therefore no surprise that UK consumers now more likely to carry credit cards that offer cash back rather than cards that offer 0% interest on balance transfers.

Cards that offer cash back are currently the most popular reward credit card as consumers seek to be rewarded for the loyalty to a card as well as receiving cash for spending on their card.

Figures released by Morgan Stanley reveal that 17% of UK cardholders have a card that offers a 0% interest deal on balance transfers compared with 21% who have a card that offers a cash back deal.

As consumers continue to look for cards that offer rewards, 15% of UK cardholders have a card that offers points redeemable on the high street. Consumers who use certain retailers often are drawn to cards that offer points that can be used with that retailer who will be working in conjunction with that card. Common credit card partners include Amazon and Sony and 15% of cardholders have one of theses types of credit cards.

“ We are seeing a shift in the dynamics of the credit card market as cardholders wise up to the long-term benefits of reward cards and turn their backs on short-term offers," said Patrick Muir, of Morgan Stanley.

“ We have found that an increasing number of our customers are using their credit cards for everyday purchases such as groceries and petrol to benefit from cash back and rewards, with our average cardholder redeeming £105 every year.”

Despite the rise in popularity of credit cards that offer rewards, some 52 per cent of UK consumers still carry cards that do not offer any form of reward.

Reward cards are most popular among older credit cardholders, with the over-50s more than twice as likely as under-30s to have a reward card with a number of retail partners or a card that collects air miles.

Men are more likely than women to have a cash back credit card, while women are more likely to have a retail reward card as they are attracted to the opportunity of redeeming the points they have built upon the high street.

Alisdair Milton
14th September 2006

More Information:

• Credit Card Benefits
  A credit card can be a highly effective and flexible financial tool for the smart shopper – and saver. It has many obvious advantages over cash and cheques – and a few hidden ones too!
• Cash Back Credit Card - General Guide
  It seems almost too good to be true; a credit card company giving back money to the user just for spending it in the first place! However, as with all good deals, there are terms and conditions.
• Cash Back or Rewards
  In the battle for new customers, credit card companies are offering to reward users for simply spending on their cards. The two most attractive systems seem to be cash back and rewards.

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