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Credit Card Rewards Redemption Rates Are on the Rise

October 11, 2011 at 8:07 AM EDT
Capital One Rewards Barometer Reveals Consumers are Gearing Up Early for the Holidays; Nearly 30% are Saving a Portion of their Cash Rewards for Holiday Shopping

MCLEAN, Va., Oct. 10, 2011 /PRNewswire via COMTEX/ --

With the consumer confidence index recently plunging to 44.5 from 59.2 in July, according to a recent survey conducted by Conference Board,* it's no surprise that consumers are seeking more value from their rewards programs. The quarterly Capital One (NYSE: COF) Rewards Barometer** revealed that rewards redemption increased during the third quarter -approximately four points from prior quarters - with 47 percent of consumers redeeming at least a portion of their rewards in the past three months (43.1 percent in Q1, 43 percent in Q2). Results also indicated "free money" continues to be the top motivation for consumers to earn and redeem rewards (60.6 percent) and nearly half (41 percent) of survey respondents had previously redeemed credit card rewards for cash. Most frequent use for cash rewards included applying it towards payment of a monthly credit card balance (39.5 percent) and depositing cash rewards into a personal savings account (23.1 percent).

"The current economic landscape is weighing on consumers' minds. Maximizing credit card rewards is one way consumers can offset the impact to their wallets," said Troy Jamison, Vice President of Loyalty Programs at Capital One. "A credit card rewards program that meets your spending needs is key, and cash rewards offer consumers additional flexibility."

Redemption Trends

With back-to-school store displays making room for holiday decorations, seasonal deals and offers, it's clear the impending holiday shopping rush is top-of-mind with consumers and retailers alike. Results indicate that -

  • More than one-quarter (27.8 percent) of cash rewards cardholders are saving at least a portion of their rewards for holiday shopping, which edges out the number of consumers saving cash rewards for bigger life milestones such as retirement (13 percent) or college payments (5.6 percent)
  • For those planning to redeem their credit card rewards during the holidays, holiday gifts (15.8 percent) outranked holiday travel (14.9 percent) as a redemption option
  • Amongst those who plan to redeem credit card rewards for holiday gifts, gift cards are the top purchase option (54.9 percent)

Rewards Satisfaction Trends

Consumer satisfaction with rewards credit card customer service has been on the rise throughout 2011. Satisfaction has steadily increased since the first quarter, with the number of cardholders who rank customer service as "excellent" growing from 25 percent to 32 percent in the third quarter. Other rewards credit card attributes receiving increasingly favorable rankings include flexibility of redemption options (with "excellent" ranking up 8.7 points from the first quarter) and ability to earn rewards quickly (with "excellent" ranking up 6.3 points from the first quarter). The number of consumers completely satisfied with their overall rewards credit card program increased just over 2 points from the first quarter (21.7 percent) to the third quarter (23.9 percent). That said, blackout dates (25.8 percent) and inability to book last minute travel (22.5 percent) continue to top barriers preventing consumers from redeeming their rewards for travel.

Looking Ahead

Consumer demand for mobile devices and applications continue to rise, with nearly half of respondents who have a Smartphone indicating they would like access to apps that let them check their rewards balance. Less than 20 percent (19.5 percent) of Smartphone-using, rewards credit card holders are currently able to view their credit card rewards balance or redeem rewards through their mobile device. More than one-quarter (26.7 percent) of Smartphone users surveyed would like a mobile app that allows them to view the rewards value of an item they're interested in purchasing.

For more information about Capital One rewards visit,

Survey Methodology
This BIGresearch® survey was conducted from Aug 23 - 26, 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® 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® consumer insights are gathered online using very large sample sizes to empower users with unique insights.

About Capital One
Capital One Financial Corporation ( is a financial holding company whose subsidiaries, which include Capital One, N.A. and Capital One Bank (USA), N. A., had $126.1 billion in deposits and $199.8 billion in total assets outstanding as of June 30, 2011. 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® 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.

The Conference Board is a global, independent business membership and research association working in the public interest* Reuters, "WRAPUP 5-U.S. consumer confidence crumbles to 2-year low,"

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

Contact : Sukhi Sahni

SOURCE Capital One