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Higher Earn Rate Beats Large Sign-Up Bonuses as Top Reason to Switch Rewards Credit Cards

March 27, 2012 at 8:17 AM EDT
Simplifying Earning Rewards Leads to a Better Rewards Card Experience According to Capital One Survey

MCLEAN, Va., March 27, 2012 /PRNewswire via COMTEX/ -- Earning more rewards for every dollar spent was the top reason card holders would be most likely to switch to another rewards credit card over large sign-up bonuses, according to the Capital One (NYSE: COF) Rewards Barometer. This is a quarterly survey among American consumers focused on how they accumulate and redeem credit card rewards issued by their bank or credit card company.* While a high earn rate is an important rewards feature, complexities around earning these rewards, including special categories which have higher rewards earn rates such as gas or groceries, or spend minimums in order to receive rewards, are impacting the overall experiences of rewards credit card holders. In fact, nearly half of those surveyed reported that if earning rewards were made simpler their experience of earning credit card rewards would improve.

"Rewards card holders should make sure they are getting great rewards value for using their card. They should read the fine print to understand the true value of how much they are earning and, importantly, how easy or hard it will be to actually use those rewards," said Amy Lenander, Vice President of Rewards Programs at Capital One. "Less fine print typically means bigger rewards and fewer hassles."

Expiring rewards continues to be a pain point for rewards card holders, with 40 percent of respondents indicating that eliminating expiration dates on rewards would improve their redemption experience. Rewards customers surveyed also indicated that adding the ability to buy anything on a card and get reimbursed for it (29 percent) would help improve their overall experience of redeeming rewards.

Top Redemption

The number one rewards redemption option is cash (45 percent), followed by gift cards and domestic airline tickets (32 percent and 28 percent respectively). In regards to how cash rewards are used, once redeemed more than one-third of consumers prefer to apply their cash rewards to their statement balance (36 percent), ahead of saving cash (24 percent) or spending cash on themselves (18 percent).

Improving Rewards

Currently, only 21 percent of consumers think they are receiving a high value for their credit card rewards. Nearly 60 percent of survey respondents noted that more special deals with retailers would enhance their experience earning rewards, followed by making earning rewards simpler at 45 percent.

Redemption Trends

Consumers' overall satisfaction with credit card rewards declined in the past three months. Over half (52 percent and 55 percent respectively) of consumers rated the ability to earn rewards quickly and the value of rewards as "very good" or "excellent" in November 2011, dropping in February 2012 (47 percent and 50 percent respectively). Results also indicate that rewards redemption remained relatively consistent in the past 3 months with 45 percent of card holders redeeming their rewards (2011: Q1 43 percent; Q2 43 percent; Q3 47 percent; Q4 42 percent).

Seasonal Findings

Additional findings stemming from the Rewards Barometer this quarter include that:

  • Rewards card holders are two-to-three times more likely to be taking a trip this spring and summer (42 percent and 64 percent respectively) than for the winter holidays in 2012 (22 percent). Also, of those planning a family vacation this spring, 20 percent have redeemed or plan to redeem rewards for their travel.
  • Survey respondents who redeem rewards for gift cards redeem most for shopping and dining (49 percent and 27 percent respectively), yet as consumers see reports of gas approaching $5 per gallon in the coming months, only 6 percent currently redeem rewards for gas cards.
  • Nearly half of rewards card holders indicated they weren't sure whether or not they were charged foreign transaction fees, which can be up to 3 percent.

For more information about Capital One rewards visit

Survey Methodology
This BIGinsight survey was conducted from February 13-16, 2012 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%. BIGinsight delivers executives timely, consumer-centric insights from multiple sources. As a comprehensive resource of information, BIGinsight represents the voice of the consumer and provides knowledge to marketers regarding consumer views on the economy, personal finance, retail, lifestyle, media and domestic and world issues.

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 $128.2 billion in deposits and $206.0 billion in total assets outstanding as of December 31, 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.

* 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