Improvement In Cash-Back Rewards Over The Last Year

Thursday, February 16th, 2012
Updated: February 16th, 2012
The content is accurate at the time of publication and is subject to change.

There has been improvement in the cash-back credit card rewards since the last year, as per the latest survey. According to the report, 48% of cash-back cards that were surveyed were paying up 1% cash back from the first dollar that is spent. This is up from 44% the previous year. Around 14% paid over 1% as cash back. Approximately 82% of these cards did not charge any annual fees and around 67% of rewards did not have any expiration dates (which is up from just 50% last year).

Greg McBride, CFA and senior financial analyst stated that unlike the debit card rewards that saw a sharp decline the previous year, credit card rewards were still alive and kicking. Credit cards were not only exempt from the ‘debit swipe fee reform,’ but a candidate who is a frequent user of the card and pays up the balances in full by the end of the month is also the ‘ideal rewards card candidate.’ This candidate is a high-volume customer who carries virtually no risk when it comes to defaulting payments. Hence, card issuers find these candidates attractive and they offer cash-back rewards as well as introductory bonuses in order to induce them to swipe their cards.

Some of the additional findings of the survey include – 48% of these cash-back cards that were evaluated by the website offered higher payouts on some of the spending categories. Just 12% of these cards had tiered payouts that were based on spending, but the majority started way below the baseline (1% payout and max out 1%).

So, the big spenders may have to consider cards that offer 2% rewards on purchases or cards, which offer annual bonus rewards apart from the rewards that are accumulated all through the year(which is based on annual spending). Around 33% of these cash-back credit cards had expiration dates on rewards, where the expiration dates were typically after about 3 to 5 years.

Introductory bonuses were offered by around 44% of these cash-back credit cards according to the survey and these could be earned after reaching a particular spending threshold within the stipulated time period or it may earned as ‘category bonus payout.’

There are no clear trends with regard to bonuses and some bonuses are bigger than the ones offered last year, but require huge spending in order to be able to qualify. The survey was carried out earlier this year.

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.

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