Reward cardholder prefer rewards levels to APR
According to a recent report the majority of credit card holders in the UK who have rewards based credit cards are more interested in the type and level of rewards that they receive from their credit card than in the rate of interest and other fees that are charged on the card. It is estimated that around 50% of rewards based cardholders are more interested in what they can earn on the card rather than on how much interest they are likely to pay.
This could be because many of those with rewards based credit cards tend to clear the balance within the interest free period anyway, which means that the APR charged will not affect them, as they are able to avoid paying interest charges. Those that plan to spread repayments on their credit card balance should look at other options, such as a 0% purchase credit card, as otherwise the interest that they pay will far outweigh the rewards that they earn on the card.
One industry official stated: "Credit card rewards programmes clearly remain an important element in attracting and retaining card customers. However, consumers need to ensure they choose the right programme to suit their spending habits and lifestyle. Issuers need to understand that consumers want more control in redemption but the trade-off is that rewards programmes do not have to be as rich in benefits as they have been. I think we’re entering a new era for rewards programmes in the UK and many of the traditional propositions need radical review."
There are many different types of rewards based credit cards on the market, and consumers are urged to find the one that best meets their needs, and offers rewards that they will use and find valuable.
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