Editorial Policy

Rewards Still Top Reason for Credit Cards

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By Steven Gibbs
March 20, 2010

Transfer balances? Receive rewards or cash back? Build your credit? When it comes to why you get a credit card what is your reason? While yours may be different, an article entitled "Why do you apply for a credit card?" on Bankrate.com gives the results of a survey conducted my some of their readers. When it came to the answers given on the exact reason of why consumers are looking for new plastic, the results were as follows:

  • Looking for a card with better rewards/perks – 29%
  • Looking for a better interest rate – 24%
  • Looking to transfer a balance – 10%
  • Looking for fewer fees/better terms – 19%
  • Unhappy with customer service – 14%
  • Unhappy with account management features – 5%
  • Need additional credit – 5%
  • Don’t currently have a credit card – 5%

While the results of the survey, which listed “looking for a better rewards/perks” as the main reason may come to surprise many, reward credit cards have been one of the leading types of credit cards issued for a while now. Because cardholders receive various rewards such as air miles, cash back as well as other things just for making purchases they would originally have used cash for; these cards have become especially useful to those who pay off their balances each month. When it comes to how issuers have reacted, we have seen issuers offer much more incentives than in the past because the rewards market has become very competitive.