Article

Consumer expectations for credit card rewards have become ubiquitous across the credit score spectrum, generations, and with both consumer and business cardmembers.

However, financial institutions face a tough balancing act. They must offer a rewards program appealing enough to attract new cardmembers, while ensuring it is profitable. Considering the costs and complex deals involved with reward vendors, compliance efforts, and potential cash reserve, community banks and credit unions may find this challenging.

From decision making to reward redemption, there are strong consumer trends in today’s competitive market. When considering how to create or optimize a credit card rewards program, consider these three statistics:

• 43% of consumers identify rewards as a top motive for seeking a new credit card.
• 35% of consumers apply for a new credit card at least once a year to take advantage of sign-up bonuses.
• 55% of consumers said the flexibility to redeem whatever they choose is important.

While trust in their financial institution is a contributing factor, what’s clear is consumers are willing to find a credit card wherever the rewards or offers best meet their needs.

Today’s rewards programs are expected to be easy to use, accessible, and available on all devices. Cardholders want an immediate line-of-sight between their spend and the reward earned, like the option to see mobile alerts on points accumulated from transactions. Elan Credit Card recently launched a new mobile app that fulfills that need by offering the ability to see points year-to-date, by statement, and by transaction.

To optimize engagement, rewards should be fully transparent, and the process of spending and receiving rewards should be highly interactive. Redemption needs to be just as easy, with the option to pay with points and/or auto-transfer earned cash to an account of the cardholder’s choice.

It takes a skillful balance to run a successful credit card rewards program appealing enough to draw loyal cardmembers while maintaining profitability and compliance. Working with an experienced partner can be the key to achieving it. Learn more about how to optimize a credit card rewards program here.