Aussies unhappy with loyalty schemes

A new study has revealed that a solid 38 per cent of Australians using reward credit cards are unhappy with their current loyalty scheme.

A lack of clarity about where cardholders can earn the most rewards points was the primary cause of dissatisfaction, with 44 per cent of those surveyed unclear about how they can collect the most rewards.

Interestingly, a further 52 per cent of those surveyed are unclear on what their points can get them.

The research, from Citi Australia, confirmed that other than annual fees, choice of reward redemption options is the most important factor when choosing a credit card.

Eighty-eight per cent of respondents prioritised annual fees in their choice, with reward options coming in at 79 per cent, followed closely by how points are valued at 78 per cent.

Regulatory changes

“Regulatory changes have impacted credit card rewards across the board in 2017. However we have seen that rewards points, alongside merchant acceptance, are still one of the most desirable offerings for current and new cardholders.” said Alan Machet, Citi's head of cards and loans. 

Importantly, the research found that regulatory change has not driven a shift in consumer behavior.

A good 62 per cent of reward credit card holders are unaware of the regulation changes on interchange fees, according to Citi.

However, after being told about the changes, 40 per cent of people say regulation changes to industry credit card fees have left them dissatisfied with their rewards program, the bank found.

Consequently, more than half of Australian rewards credit card holders are willing to apply for an additional card with a different provider to get better rewards.

Savvy millennials

A solid 57 per cent of reward credit cardholders are open to switching credit cards to get better rewards, millennials (aged between 20 and 34 years) are even more likely at 67 per cent.

And, while Australian credit card holders are seen to remain loyal to the best rewards options on the market, 12 per cent have looked around for a new rewards card because of the interchange fee regulations rolled out in July.

A bout 71 per cent of millennials surveyed say they compare multiple rewards program offerings before making a choice on a credit card with half saying they only make purchases where they can earn points.

This compares to 27 per cent of those between 45 and 57 and 36 per cent of those aged between 35 and 44.

City research showed millennials are savvy rewards customers demanding instant gratification from their credit card reward programs.

While the study showed 37 per cent of people want instant redemption of their rewards points, millennials are more inclined to demand instant gratification, at 53 per cent.

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