Understanding Credit Card Rewards: A Successful Model Under Threat

Credit card rewards programs are expensive and intricate for issuers to maintain, but they are also enormously popular with cardholders and a significant driver of customer acquisition. This Javelin Strategy & Research report looks at the current landscape for rewards programs, including possible responses by the industry should Congress pass the Credit Card Competition Act. The legislation, if enacted, could put rewards programs on a path toward significant reductions in offerings and inclusion.

In the meantime, card issuers continue to look for ways to innovate with their reward programs for cardholders, including early access to premier events and experiences, bonus rewards days for spending, and even rent-based cashback rewards. Rewards related to travel and money back to customers continue to be strongly popular with cardholders.

Key questions discussed in this report:

• How much do issuers and cobranded partners spend on card rewards programs?
• What are the most popular types of credit card rewards? 
• How are issuers responding to changes in the rewards market? 
• What are some of the innovations we are seeing in card rewards?
• Will the Credit Card Competition Act affect card rewards?

Companies Mentioned:

Alaska Airlines, Amazon Business, American Airlines, American Express, Bank of America, Bilt, British Airways, Bureau of Transportation, Capital One, Cardless, Chase, Citi, Delta, Discover, Food Network, Hilton, iHeartRadio, James Beard Foundation, Lowes, Marriott, Mastercard, Southwest Airlines, Starbucks, U.S. Bank, United Airlines, Visa, Wells Fargo