IMGCAP(1)]
The more credit cards a consumer has, the more important rewards become a factor influencing card choice, according to an Aite Group report. For example, among consumers polled recently who have six to nine cards, 53% cited rewards as an important factor in their card choice, whereas 35% of consumers with two cards cited rewards as an important factor, according to Boston-based Aite's study "Credit Card Rewards: Why Issuers Should Compete on Service." Aite conducted an online survey of consumers in January. Some 42% of respondents reported that a rewards program was an important reason for getting a new credit card, second only to "no annual fee" at 64%. A lower interest rate than the consumer's previous card ranked third with 39% of respondents, according to the study. Aite Group contends card issuers will fail to differentiate themselves by trying to one-up the competition by expanding the scope of their rewards because many cardholders belong to more than one rewards program. "Issuers can differentiate themselves by creating a rewards hub that enables cardholders to aggregate and integrate programs," the report states.
