What exactly do customers want when it comes to credit card rewards? What will attract customers that will enhance engagement and brand loyalty levels?
Ally Bank officials believe they have the answer: Cash.
According to a recent Ally Bank survey, more than half (58%) of survey respondents who have a credit card said they preferred cash back rewards, particularly travel rewards, store promotions, and introductory interest rates or bonus rewards. What’s more, the study found that two thirds of those respondents (66%) would be interested in a credit card that would give an additional bonus on cash back rewards if those rewards were placed into a bank account.
Ally Bank conducted its credit card study to understand consumer preferences when it comes to credit card rewards prior to the recent introduction of its Ally CashBack Credit Card.
Ally Bank CEO and President Diane Morais told Loyalty360 that consumers are “pretty savvy” when it comes to credit card reward programs.
“The majority of survey respondents who have a credit card said they preferred cash back as opposed to limiting rewards to specific uses, such as travel,” Morais explained. “We also were pleased to hear that 80% of consumers with credit cards said they would prefer to have multiple financial products (such as a bank account, loan, or credit card) with the same bank if they earned rewards for doing so. The Ally CashBack Credit Card features an additional 10% bonus if cash back rewards are redeemed into an Ally Bank non-IRA Online Savings, Interest Checking, or Money Market Account, so we feel we’re offering a product that consumers will value.”
Interestingly, only 36% of consumers with credit cards use their card for daily purchases, often missing out on rewards on purchases like gas and groceries; another 28% of respondents admitted to losing out on rewards because they expired or were too difficult to cash in.
Considering all age groups, millennials who do use credit cards (78%) were least likely to have lost out on credit card rewards because they expired or it was too difficult to use them. But millennials may be missing out on rewards by simply not using credit cards. Of those millennials surveyed by Ally, 58% said they don’t even own a credit card, compared with 44% of Gen X and 43% of Baby Boomers.
Morais said there were two study findings that stood out for Ally Bank officials.
“The fact that only 36% of consumers with credit cards use their cards for daily purchases, and 28% of respondents lose out on rewards because they expired or were too difficult to cash in,” she explained. “The bottom line is understanding consumer behavior is important when developing a credit card product. A competitive rewards program−one that is flexible and simple to use−is really what consumers want and will use. We think we have accomplished that with the Ally CashBack credit card, given the 2% cash back on eligible gas and grocery purchases, 1% cash back on other purchases, and uncapped rewards that never expire for accounts that are open and in good standing.”