Consumers prefer airline credit cards to cash back cards
New research from Auriemma Consulting Group indicates that airline credit cards have surpassed cash back credit cards when it comes to frequency of use by consumers, according to ACG's editor of the syndicated Cardbeat report.
In 2005, 53 percent of reward credit card users said that their card of choice was a cash back credit card. That number declined to 39 percent in 2006.
And, as cash back credit cards saw their popularity slip, airline credit cards became more favored. The percentage of reward card users who named airline cards as their top choice rose from 41 percent in 2005 to 48 percent in 2006.
Even so, consumers view cash back as the most valuable rewards type, followed by points-based and merchant rewards.
Meanwhile, rising interest rates have begun to spur consumers to move away from rewards and toward low interest rates when choosing a credit card. Cardbeat research showed that the number of consumers who said APR was the main factor in selecting a specific reward credit card increased from 14 percent in 2005 to 25 percent in 2006.
Cardbeat's data came from a survey of 508 credit card users in December 2006 and 500 credit card users in June 2005. Initially, the numbers were compared in Cardbeat's December 2006 issue.
Among bank issuers, cash back credit cards are being scaled back as companies like Citi work to lower costs. The editor of Cardbeat highlighted Citi's recent decision to trim its cash rewards from 5 percent to 2 percent while adding more merchant categories.
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