BIRMINGHAM, Ala. Credit card issuers need to do a better job of explaining their rewards programs, according to a new survey that also indicates there is a big revenue opportunity in doing so.
The 2013 Credit Card Satisfaction Study by J.D Power showed many consumers say they remain confused about their credit card rewards. Customer understanding of how to earn and redeem rewards with their credit card has dropped over the past year, with 59% of customers saying they "completely" understand how to earn rewards in 2013, compared with 66% in 2012. One-third of customers said they are unaware of the benefits associated with their card.
Customers who use their card's benefits spend an average of $400 more per month on their card, compared with those who are aware of benefits but do not use them, the study indicated. “It certainly looks like many issuers are not explaining their rewards programs thoroughly to get consumers excited about using their cards,” said Bill Hardekopf, CEO of LowCards.com. “Four hundred dollars in additional spend per month comes to about $5,000 a year per cardholder a good reason to improve your communications.”
