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Capital One Launches Quarterly Rewards Barometer Examining Credit Card Rewards Usage and Seasonal Redemption Trends

April 19, 2011 at 9:14 AM EDT
Blackout dates are a top barrier to spring trips; Consumers would rather use their rewards to attend the Royal Wedding than the White House Easter Egg Roll

MCLEAN, Va., Apr 19, 2011 (BUSINESS WIRE) --

Capital One Financial Corporation (NYSE: COF) today released the findings of the first Capital One Rewards Barometer, a survey focused on how consumers accumulate and redeem credit card rewards*. For more than a decade, Capital One has been dedicated to understanding what motivates consumers and this quarterly index is a new tool for gathering and sharing consumers' evolving insights towards credit card rewards and benefits.

This quarter's survey found that only 22 percent of U.S. credit cardholders are completely satisfied with their rewards program. In addition, the majority of consumers polled (57 percent) have not redeemed any reward points in the past three months. For those that would like to redeem their rewards but didn't, common issues cited were difficulty in redeeming (28 percent) and a lack of attractive redemption options (27 percent). Many consumers expressed a desire for more flexibility around redemption options and an ability to earn rewards faster. About one-in-five (19 percent) consumers surveyed believe the flexibility of redemption options are fair or poor, and about one quarter (23 percent) rate their ability to earn rewards quickly as only fair or poor.

Looking ahead, nearly one-third (29 percent) of consumers surveyed said that blackout dates would prevent them from using credit card rewards to take a spring trip. This was a primary barrier to spring travel reported by consumers along with not having enough rewards earned to take a trip (58 percent). As for where they'd go, respondents four-to-one would rather witness the Royal Wedding at Westminster Abbey (31 percent) than go to Washington, D.C. to participate in the annual White House Easter Egg Roll (7 percent).

"Americans now, more than ever, are looking for additional value from their credit cards and many consumers consider rewards as a key factor in determining which card they choose," said Troy Jamison, Vice President of Loyalty Services at Capital One. "At Capital One, our priority is to understand what consumers value and deliver choices that are compelling, simple and easy."

Other key findings of the Capital One Rewards Barometer include:

  • The number one motivation for consumers to earn and use credit card rewards is that it's considered free money (57 percent). Many consumers (34 percent) also noted that they appreciate the everyday savings provided by rewards programs
  • Consumers would rather be able to redeem credit card rewards for domestic than international airline tickets (47 vs. 30 percent respectively)

The Rewards Barometer also uncovers gaps in consumer redemption desires versus realities. While 72 percent want the ability to redeem rewards for cash, only 54 percent of survey respondents actually do. And although 47 percent of credit card consumers surveyed are able to redeem rewards for merchandise like electronics and housewares, only 32 percent say that they want this option.

Capital One offers the following tips for consumers on how they can optimize their credit card rewards whether looking to earn rewards toward a much needed vacation or cash-back for family needs or a small personal indulgence:

1.Find the right card for you: Building rewards is only worth it if you will actually use them. Evaluate your spending habits and determine what you want to redeem for and then find a card that is a match.

2.Understand your limit: Some cards have limits on how many rewards you can earn, so make sure you understand the maximum earnings for rewards.

3. Calculating your earnings: Take advantage of higher-than-average introductory rewards rates and sign-up bonuses, but use the permanent rewards earnings as a basis for comparing cards - with many cards offering 1 percent or one cent per dollar spent.

4.Look at the fine print: Many rewards credit cards may have similar offerings; however, look at the fine print to catch important differences like reward expiration dates, annual fee, penalty clauses and blackout dates.

For more information about Capital One rewards visit, http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.capitalone.com&esheet=6688968&lan=en-US&anchor=www.capitalone.com&index=1&md5=9ed85fba3f8f138b98c1ee0bdb562955

* Survey conducted among U.S. Adults 18+ who indicated that they currently have credit card with a rewards program that is issued by a bank or credit card company

Survey Methodology
This BIGresearch(R) survey was conducted from March 25-March 28, 2011 among U.S. Adults 18+ who indicated that they currently have a "rewards credit card" - that is, a credit card with a rewards program that is issued by a bank or credit card company. The total sample size for this survey was N=1,045, with a margin of error of +/- 3.1%. BIGresearch(R) consumer intelligence provides answers for the marketplace around demand, media influence, predictive applications, and new thinking. Users include some of the largest manufacturers, retailers, Wall Street firms, hedge funds, and leading edge companies across the U.S. and Internationally. BIGresearch(R) consumer insights are gathered online using very large sample sizes to empower users with unique insights.

About Capital One
Capital One Financial Corporation (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.capitalone.com&esheet=6688968&lan=en-US&anchor=www.capitalone.com&index=2&md5=38ac1a14edf58187d304710f682f4dbd) is a financial holding company whose subsidiaries, which include Capital One, N.A. and Capital One Bank (USA), N. A., had $122.2 billion in deposits and $197.5 billion in total managed assets outstanding as of December 31, 2010. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients. Capital One, N.A. has approximately 1,000 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia, and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

Capital One is committed to driving industry leading rewards by consistently engaging its customers with rich rewards, perks and benefits. The No Hassle Rewards(R) program from Capital One offers easy ways to earn rewards and a flexible suite of redemption options including travel, cash back, merchandise, gift cards, experiential rewards and more. With No Hassle Rewards, there's no limit to the amount of rewards a customer can earn and rewards don't expire.

SOURCE: Capital One Financial Corporation

Capital One Financial Corporation
Sukhi Sahni, 703-720-2390
sukhi.sahni@capitalone.com