Consumers want a long list of benefits from their credit cards, but no annual fees and rewards programs top everything else. A recent report from Aite Group shows that 64 percent of consumers identify the absence of an annual fee as the key reason they get a new card; 42 percent name rewards programs as the prime motivator; 39 percent put lower interest rates as the leading factor; and 33 percent are attracted by zero-percent balance transfers. Trailing far behind as key persuaders are credit card company reputation (23 percent), clear billing, finance, and interest policies (15 percent), and dissatisfaction with customer service from a previous card company (a meager 11 percent).

Rewards-lovers tend to be more affluent; the study found that 62 percent of those consumers with annual incomes greater than $100,000 selected cards because of their rewards programs. “Putting another card into the hands of rewards-driven cardholders is no guarantee of success,” Aite Group senior analyst Ron Shevlin cautions in the report. “These consumers are more likely than others to pay their balances in full (negatively impacting potential interest revenue) and just as likely to want a card with no annual fee (negatively impacting potential fee revenue).”

So what should issuers do? “Differentiate on services,” Shevlin advises. “Because so many rewards cardholders belong to other rewards programs, differentiating on a product—the reward program itself—is difficult. But few (if any) rewards-providing firms help these consumers to manage the programs they belong to. As issuers look to one-up each other with ever expanding rewards, we believe that issuers can differentiate themselves by creating a rewards hub that enables cardholders to aggregate and integrate customers.”

Other steps include getting merchants on-board with offers and extending cardholder customization opportunities.

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