Cash-Back Credit Card Rewards Improved Over Past YearBy Bruce Woods
Feb 16 2012
Cash-back credit card rewards improved modestly over the past year, according to a new survey released today by Bankrate.com. Almost half of the cash-back cards (48%) that Bankrate surveyed pay 1% cash back from the first dollar of spending, up from 44% last year, and 14% pay more than 1%. Eighty-two percent of the cards are free of annual fees, and 67% of the rewards are free of expiration dates (up from 50% last year).
“Unlike debit card rewards, which declined sharply over the past year, credit card rewards are still alive and well,” said Greg McBride, CFA, senior financial analyst for Bankrate.com. “Not only were credit cards exempt from debit swipe fee reform, but the ideal rewards card candidate is a consumer that uses the card frequently but pays the balance in full at month-end. This high-volume, loyal customer with very low risk of default is attractive to card issuers, who offer cash-back rewards and introductory bonuses to incent cardholders for swiping their plastic.”
- 1% cash back continues to be the baseline from which comparisons should begin.
- 48% of the cash-back credit cards that Bankrate evaluated offer higher payouts for certain spending categories (some of which rotate each quarter).
- Only 12% of the cards have tiered payouts based upon spending – the majority start well below the baseline 1% payout and max out at 1%.
- Big spenders should either consider cards that pay 2% rewards on all purchases, or cards that offer an annual bonus reward (in addition to rewards accumulated throughout the year) that is based upon annual spending.
- Among the 33% of cash-back cards with rewards expirations, the typical expiration dates are after three or five years.
- Offered by 44% of the cash-back cards in Bankrate’s survey.
- Can be earned by reaching a specific spending threshold in a set number of months or as a category bonus payout.
- No clear year-over-year trend: some bonuses are larger than they were last year, but they require exponentially more spending in order to qualify.
Bankrate surveyed 50 cash-back credit cards offered by 19 large U.S. issuers during the week of Jan. 9, 2012. The full results of the survey can be found here: http://www.bankrate.com/finance/credit-cards/credit-card-rewards-survey-cash-still-king.aspx.
And consumers can compare cash-back credit card offers at http://www.bankrate.com/credit-cards.aspx.
About Bankrate, Inc.
Bankrate is a leading publisher, aggregator and distributor of personal finance content on the Internet. Bankrate provides consumers with proprietary, fully researched, comprehensive, independent and objective personal finance editorial content across multiple vertical categories including mortgages, deposits, insurance, credit cards, and other categories, such as retirement, automobile loans, and taxes. The Bankrate network includes Bankrate.com, our flagship website, and other owned and operated personal finance websites, including CreditCards.com, Interest.com, Bankaholic.com, Mortgage-calc.com, CreditCardGuide.com, Nationwide Card Services, InsuranceQuotes.com, CarInsuranceQuotes.com, InsureMe, Bankrate.com.cn, CreditCards.ca, NetQuote.com, and CD.com. Bankrate aggregates rate information from over 4,800 institutions on more than 300 financial products. With coverage of nearly 600 local markets in all 50 U.S. states, Bankrate generates over 172,000 distinct rate tables capturing on average over three million pieces of information daily. Bankrate develops and provides web services to over 80 co-branded websites with online partners, including some of the most trusted and frequently visited personal finance sites on the Internet such as Yahoo!, AOL, CNBC and Bloomberg. In addition, Bankrate licenses editorial content to over 500 newspapers on a daily basis including The Wall Street Journal, USA Today, The New York Times, The Los Angeles Times and The Boston Globe.
SOURCE Bankrate, Inc.
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