Some new research from Capital One indicates that consumers are becoming increasingly disgruntled with rewards credit cards.
The quarterly Capital One Rewards Barometer survey looks at consumer attitudes and practices concerning credit card rewards and covers a range of American credit card issuers.
The latests results published by the Capital One Rewards Barometer were based on a poll taken in February 2012. The previous poll in November last year revealed that 52 percent of consumers ranked their ability to earn reward points as very good to excellent.
However, the February results indicate this has fallen to 47 percent. In line with this, the November survey showed 55 percent rated the rewards they had received as very good to excellent while in February this figure dropped to 50 percent.
This comes as a surprise considering credit cards have recently been padding out their rewards programs with additional features and bonuses. However, it seems that credit card rewards programs are just not offering what consumers want.
One of the key results highlighted by the survey was that a paltry 21 percent of those who responded felt that they were getting a high value for their rewards. A staggering 60 percent of the respondents believed that they would get more from rewards if their credit card issuers negotiated special offers with more retailers.
Expiration dates were an annoyance for 40 percent of the respondents while 45 percent felt that the rewards programs offered by their credit card issuers were far too complicated.
Capital One addressed the issue of complicated reward programs in a recent press release, saying,
While a high earn rate is an important rewards feature, complexities around earning these rewards, including special categories which have higher rewards earn rates such as gas or groceries, or spend minimums in order to receive rewards, are impacting the overall experiences of rewards credit card holders.
Some programs are so complex that one could be forgiven for thinking that they were actively designed to stop consumers from redeeming the maximum rewards. While no credit card issuer would ever admit to this, it probably is the case. After all every point or mile cashed in costs the issuers money, and if everyone redeemed all of their rewards the programs would no longer be cost effective for the issuers.
When signing up for a rewards credit card, it is essential that you read and more importantly understand the terms and conditions attached to the account before you apply. If you have chosen a card which has a rewards programs with complex rules and regulations, then you must be willing to put in the time and effort to jump through a few hoops otherwise you would be better off choosing a much ore simple, but potentially less generous, reward program.
Rewards card holders should make sure they are getting great rewards value for using their card. They should read the fine print to understand the true value of how much they are earning and, importantly, how easy or hard it will be to actually use those rewards,
said Amy Lenander, Vice President of Rewards Programs at Capital One.
Less fine print typically means bigger rewards and fewer hassles.
Generally speaking, it is often a bad idea to carry balances on rewards credit cards, mainly because the interest rates that apply to these cards are usually higher than the average credit card. It is a good rule of thumb to only charge purchases to a rewards card if you are sure you will pay them off within 2 or 3 months.
If you intend to pay off the purchase over a longer period of time then it is much smarter to use a lower interest, or even an interest free, credit card instead of a reward card with a higher rate of interest.
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