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How are Rewards Cards Helping People Through Tough Economic Times?


The popularity of rewards cards is increasing as Americans tighten up their purse strings and try to get the biggest ‘bang for their buck’. Tough economic times means that people are investigating different ways to stretch their dollars and rewards cards are one way they have found to deal with the financial strain.

Loyalty cards, bonus points and cash back bonuses are applied to everything from common purchases such as grocery items, gasoline, bank balances and movies. Until recently, rewards programs were mainly airline rewards but a 2009 study conducted by a Cincinnati based marketing firm, Colloquy, identified the number of people registered in credit card reward programs surpassed the number of people registered in airline frequent flier programs.

Why are Rewards Cards So Popular?

Past rewards programs were applied to what many would consider to be luxury items. Consumers would get points for trips and travel packages booked through airlines. Now consumers can get points for more every day goods. Trips to the grocery, gas and clothing outlets can net points that can be redeemed for cash back or put toward other purchases.

How Rewards Can Help?

Getting a reward, no matter how small, is a boost for the consumer and creates brand loyalty. Redeeming points for certificates allows consumers to get bonuses for every day purchases.

Not everyone goes shopping with cash in their pocket. Paying by cash does not get any rewards. But, if you pay with a credit card or rewards card, which has a good rewards program, it may offer cardholders an opportunity to collect points for every dollar they spend. Then consumers can redeem points for gift certificates, credits or savings at grocery outlets, and gas purchases.

Which Program is Most Popular?

The most popular rewards program is a cash back program. Cash back rewards allows the consumers to get back money that they can use in what ever way they want. Ruth Susswein, deputy director of national priorities at Consumer Action says, “Of all the different rewards programs, cash back still offers the most value.”

Cash back rewards program often offer immediate gratification with their purchases. For example, some credit cards give an automatic rebate to the consumer of 1 percent cash back for every dollar they spend. Airline rewards or other mileage programs, on the other hand, often require significant investment and an application process to redeem the points before consumers see a reward.

Program Problems

Choosing the best rewards card program can help the financial strain on a family’s cash flow that has been stretched thin. Before being drawn into the bonuses offered by rewards card, consider some people over spend just to get the rewards. This may lead to people over spending just to get the reward.

In addition to over spending to get rewards, some consumers may sign up for cards that charge annual fees. If consumers spend lots to get a little, the rewards cards defeat the purpose of helping consumers meet the financial strain. To get the best deal, investigate reward cards programs to find the one best suited to your situation.

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