Credit cards with rewards more popular than 0% deals

September 2, 2006

By Peter Kenny

Credit cards with rewards more popular than 0% deals Credit cards that offer rewards and cash back to cardholders are now more popular than cards with zero per cent offers, according to a new study from Morgan Stanley Credit Card.

The study, which questioned 2000 UK cardholders, found that 21 per cent of those asked currently had a credit card with a cash back offer, while 15 per cent carried a credit card that offered a rewards scheme. A further 15 per cent of those surveyed said they also used a card that collected points that could be redeemed in partner outlets. Those who revealed they carried a credit card that offered a 0% deal amounted to 17 per cent, a surprisingly low figure.

Credit cards that offer rewards and cash back were particularly popular amongst the over fifties. It was found that over fifties were twice as likely to use a credit card that offered rewards and cash back than a person under thirty. The over fifties like to travel as they are twice as likely as the under thirties to have a credit card that offers air miles.

The survey also found that an astonishing 52 per cent of cardholders do not have a credit card that offers rewards or cash back. Men are more likely to use a credit card with cash back than women, 24% compared to 19%. At the same time more women have a card that offers a retail reward scheme than men, 17 per cent compared to 12 per cent.

The managing director of Morgan Stanley Credit Card, Patrick Muir, said, “We are seeing a shift in the dynamics of the credit card market as cardholders wise up to the long-term benefits of reward cards and turn their backs on short-term offers. We have found that an increasing number of our customers are using their credit cards for everyday purchases such as groceries and petrol to benefit from cash back and rewards, with our average cardholder redeeming £105 every year.”