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"Credit card reward schemes need to be more transparent"

By admin | September 20th, 2008 | Cash Back & Rewards

According to one industry official credit card rewards schemes need to be more transparent in order to better benefit consumers. This comes after a survey revealed that many consumers with rewards based credit cards were failing to collect their rewards for one reason or another. Many people have signed up to rewards based credit cards because they enable the consumer to get something back from the credit card provider in exchange for using the card.

One official from Sainsbury’s Credit Cards has said that lenders need to exercise greater transparency when it comes to credit card rewards, stating that many consumers do not understand the rewards process and how it works, and therefore many people are missing out on rewards that they are entitled to. In 2005 there were just 122 rewards based credit cards available but by 2008 this had rocketed to 190 rewards based cards on the market.

Recent research showed that there were three main reasons why consumers fail to collect their credit card rewards. The main reason was that the reward was too small to bother with, and around 42% of consumers cited this reason for not claiming their rewards. Another 24% of consumers thought that the claiming process was too difficult and therefore they did not claim their rewards. A further 23% of consumers said that they did not know how to redeem their rewards and this is why they had not claimed.

The Sainsbury’s spokesperson said: “The credit card industry is increasingly using reward schemes but our research suggests that many of these either offer poor value or, because the rewards are too difficult to redeem, a false value. Consumers have a right to know what their credit card reward schemes are worth in pounds and pence and also how easy they are to use and redeem. The industry has a great deal of work to do in this area”

Tags: Credit Cards, rewards

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