When It Comes To Credit Card Rewards, Cash Is King

TNS Study Finds Cash Back Rewards Gain in Popularity in Current Economic Climate

NEW YORK, The TNS Consumer Credit Card Program Study found that there is a marked increase in consumers choosing cash back rewards for credit and debit card usage, over that air mile rewards and rebates programs. The study was conducted by TNS, world leader in market insight and information.

Penetration of cash back programs amongst all cardholders surveyed rose from 57 percent to 61 percent from 2007 to 2008 and is forecasted to gradually increase at least until 2010.

The combination of age, income and net worth is a key driver for rewards usage. Cash back is the most popular type of rewards program across all the age/affluence segments surveyed, with the exception of the Younger Upper Mass segment . This segment is most likely to select bonus points, followed by cash back rewards. 65 percent of Older Upper Mass respondents have cash-back cards, compared with 58 percent of the Affluent respondents. The Affluent and Young Affluent are by far the most influenced by air miles at 30 percent and 24 percent ownership, respectively.

Rewards cards are influential in many of customers’ essential decisions related to credit cards, from acquisition to primary card status. Most often, a rewards card is considered the primary card and is typically the “top of wallet” card and used more than its counterparts.

“This study found that rewards programs translate into higher spend and greater loyalty,” said Joe Hagan, senior vice president, financial services, TNS. “Issuers need to tailor rewards and redemption programs by integrating each segment’s level of need.”

The maturing credit card rewards market has prompted issuers to broaden their appeal by reassessing program value and catering to diverse card segment members. “In today’s economic climate, issuers are faced with increasing competition and commoditization, all while pressure is mounting for consumers to apply only for the right cards and pay off their balances,” said Hagan. “With the stakes so high for rewards, issuers must offer significant benefits to drive superior acquisition, retention and loyalty.”

TNS surveyed 3,901 households between August and November 2008 concerning their credit and debit card attitudes and behavior. The study has been running since 2005.

# # #

About TNS Consumer Card Strategies Research Program
The TNS 2008 Consumer Card Strategies Research Program was used to develop this report. Data was collected through a 24-page mail questionnaire that was fielded between August and November 2008. A total of 11,400 surveys were mailed, stratified by age, income, and gender. A total of 3,901 households responded to the survey, yielding a response rate of 34percent.

In order to adjust for a stratified sampling procedure and to ensure that the responses of the surveyed households reflect the true distribution of U.S. households, the sample cases were weighted using the 2008 U.S. Census estimates of the age/income distribution for total U.S. Households. There are 114.7 million households.

About TNS
TNS is a global market information and insight group.

Its strategic goal is to be recognized as the global leader in delivering value-added information and insights that help its clients make more effective business decisions.

TNS delivers innovative thinking and excellent service across a network of 80 countries. Working in partnership with clients, TNS provides high-quality information, analysis and insight that improves understanding of consumer behavior.

TNS is the world’s leading provider of customized services, combining sector knowledge with expertise in the areas of Product Development & Innovation, Brand & Communications, Stakeholder Management and Retail & Shopper. TNS is a major supplier of consumer panel, media intelligence and audience measurement services.

TNS is the sixth sense of business™.

For more information about TNS, please visit www.tnsglobal.com

The Kantar Group
The Kantar Group is one of the world’s largest research, insight and consultancy networks. By uniting the diverse talents of more than 20 specialist companies – including the recently-acquired TNS – the group aims to become the pre-eminent provider of compelling and actionable insights for the global business community. Its 26,500 employees work across 80 countries and across the whole spectrum of research and consultancy disciplines, enabling the group to offer clients business insights at each and every point of the consumer cycle. The group’s services are employed by over half of the Fortune Top 500 companies. The Kantar Group is a wholly-owned subsidiary of WPP Group plc. For further information, please visit www.kantargrouptns.com