MCLEAN, Va., Aug. 9, 2012 /PRNewswire/ -- The Capital One (NYSE: COF) Rewards Barometer (www.capitalone.com) today revealed that while 33 percent of rewards card holders reported this May they would use rewards for summer vacations, only 21 percent redeemed. According to the barometer, a quarterly survey among American consumers that focuses on how they accumulate and redeem credit card rewards, the top barrier preventing customers from using their rewards points for travel was not having enough rewards to book the trip they wanted (43 percent). Blackout dates and lack of availability also prevented cardholders from redeeming their rewards for travel.
"Card holders should understand that sometimes it can be difficult to use the rewards they've earned with some programs," said Amy Lenander, Vice President of Rewards Programs at Capital One. "At Capital One, we design our rewards programs to offer great value, flexibility and ease of use. For example, our travel rewards customers can redeem their miles for any travel purchase, even if it's booked at the last minute."
Understanding Extra Fees
When card holders redeem rewards for travel, their trip is not always as "free" as expected since they are sometimes charged extra for airline taxes, fuel surcharges, and booking fees when they redeem. According to the barometer, 37 percent of cardholders who used rewards for travel had to pay fees this summer when they redeemed their rewards. That said, more than one-third of respondents surveyed are not sure if they are charged a fee or additional expense when using rewards to book travel. Not only are card holders often unaware of the extra fees charged for rewards redemption, but more than half of the respondents (52 percent) are not sure if they are charged foreign transaction fees on their credit card purchases while traveling abroad.
"Take the time to understand your rewards programs. Before you plan your next trip, find out if you need to pay anything out-of-pocket to redeem rewards, and if you can cover extra fees, like checked baggage fees, using your credit card rewards," added Lenander.
Back to School Redemption
As summer travel winds down, cardholders with flexible rewards programs can change gears and start planning to save during the fall shopping season by using their credit card rewards. With 60 percent of surveyed parents with rewards cards planning to spend $101 to $500 per child on "back-to-school" expenses, credit card rewards such as cash back can lessen the impact on their wallets. Back-to-school is also a good time for parents to start educating their children on good credit habits. According to the survey, 74 percent of those surveyed would be more willing to get a credit card for their child now or when they reach college, if it built good credit behavior by offering rewards for actions like paying bills on time and staying within the credit limit.
Early Holiday Planning
Many card holders are already thinking about saving up their rewards for holiday purchases. According to the Rewards Barometer, 32 percent of rewards card holders will consider redeeming rewards toward holiday gifts, and 13 percent already have plans to do so. Of those with plans to redeem for holiday gifts, more than half chose gift cards (58 percent) over merchandise (18 percent).
Additional trends stemming from the Rewards Barometer this quarter include:
- Since the launch of the Rewards Barometer in the spring of 2011, "free money" remains the top motivation for consumers to earn and redeem rewards at 59 percent.
- Cash remains the top rewards redemption option at 42 percent, followed by domestic airline tickets (31 percent) and gift cards (28 percent).
- Redemption rates remain consistent in 2012, with an average of 44 percent redeeming in the prior three months.
- More than 90 percent of rewards card holders continue to be satisfied, very satisfied or completely satisfied with their rewards credit card.
Capital One offers the following tips for rewards card holders to get more from their rewards program:
- Look at the fine print: Many rewards credit cards may have similar offerings; however, look at the fine print to catch important differences like additional fees charged when redeeming, reward expiration dates, and blackout dates.
- Account for extra fees: Additional charges such as fuel surcharges, baggage fees and foreign transaction fees can add up, so take those costs into consideration when budgeting for your travel. Also investigate whether your credit card rewards program allows you to use rewards to cover these costs.
- Redeem on the go: Looks for cards that make it easy for you to redeem your rewards, like allowing you to erase expenses straight from your mobile device during or after your vacation. (http://www.capitaloneventure.com/)
This BIGinsight survey was conducted from July 9-12, 2012 among U.S. Adults 18+ who indicated that they currently have a "rewards credit card" – that is, a credit card with a rewards program that is issued by a bank or credit card company. The total sample size for this survey was N=1,045, with a margin of error of +/- 3.1%. BIGinsight delivers executives timely, consumer-centric insights from multiple sources. As a comprehensive resource of information, BIGinsight represents the voice of the consumer and provides knowledge to marketers regarding consumer views on the economy, personal finance, retail, lifestyle, media and domestic and world issues. www.BIGinsight.com
About Capital One
Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., Capital One Bank (USA), N. A., and ING Bank, fsb, had $213.9 billion in deposits and $296.6 billion in total assets outstanding as of June 30, 2012. Headquartered in McLean, Virginia, Capital One and ING DIRECT offer a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has approximately 1,000 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.
Capital One is committed to driving industry leading rewards by consistently engaging its customers with rich rewards, perks and benefits. The No Hassle Rewards® program from Capital One offers easy ways to earn rewards and a flexible suite of redemption options including travel, cash back, merchandise, gift cards, experiential rewards and more. With No Hassle Rewards, there's no limit to the amount of rewards a customer can earn and rewards don't expire.
* Survey conducted among U.S. Adults 18+ who indicated that they currently have a credit card with a rewards program that is issued by a bank or credit card company
Contact: Sukhi Sahni
SOURCE Capital One