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Most Australians with credit cards view rewards as less beneficial than other card features, suggest survey data released this week by Australia-based research firm Research International. Earlier this year the company surveyed 1,402 credit cardholders between the ages of 18 and 60. Fifty-six percent of respondents said they preferred cards that have no or low annual fees to cards that offer rewards. Some 60% of respondents said they redeem credit card points for discounts on groceries, while 55% of cardholders said that they redeem card points for petrol discounts. Most respondents also said they were more interested in purchase discounts that can be used within a relatively short time period instead of rewards whose benefits typically accumulate over a longer span, a trend that could provide another signal of a bad economy. "The shift to everyday rewards is most likely a combination of trying to manage daily costs better in the current economic environment," Jonathan Sinton, Research International strategy director, tells CardLine Global. "But [it] also reflect[s] a desire for more instant gratification rather than saving points up for many years." Sinton adds that recent efforts by the Reserve Bank of Australia to limit or reduce interchange rates have made it more difficult for issuers "to retain the value in their reward schemes," which has made some rewards less attractive to cardholders. For the survey, in fact, only 27% of respondents expressed interest in rewards that offer airline miles. "The market is polarizing to some extent," Sinton says. "There is a strong desire amongst many [cardholders] to consolidate their wallets and go for free 'no frills' products, but there remains a desire by others for a full-blown rewards program, particularly high spenders and business spenders." Frank Lopez, an analyst with Brisbane-based research firm Cannex Pty Ltd., points to an additional trend that favors discounts over other rewards: Retailers working with issuers to offer credit cards. Those cards offer incentives to cardholders who purchase goods from the retailer, he tells CardLine Global.
