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Banking and Cards Research

Digging into the Customer Experience: Banking and Credit Cards

Corporate Insight’s Bank Monitor, Credit Card Monitor and Small Business Card Monitor provide ongoing coverage of the products, websites and overall customer experience offered by the nation’s leading banks and card issuers. Our value-added banking and credit card research digs deeply to evaluate the retail and small business customer experience.

Gas Reward Cards PDF Print E-mail
This Credit Card Monitor Report looks at card products that solely offer gas-based rewards. Coming in two iterations – co-branded cards with accelerated earnings at one retailer and universal cards offering bonus earnings at any gas station – these cards can both generate impressive rewards for consumers, attract new clients and create new spending for card issuers. As we compared the various options available to prospective card members, we focused on the following card features:
  • The rate of return for both gas purchases and all other spending
  • Introductory APR and bonus earnings offers
  • How rewards are redeemed and how much each card offers in rewards during the first year

Somewhat surprisingly, only 33% of firms we track are currently offering gas-based credit cards, with only two issuers providing universal cards. Virtually all of the cards offer self-contained rewards programs, which describe their earnings in terms of percentage cash back or percentage returns. Only four of the 21 cards looked at offer earnings in terms of “points.” While three of the issuers offer ongoing rewards on all of their cards, the fourth, which offers co-branded cards from some of the largest American oil companies, provides rewards programs for only two of its four cards, and even those expire after an initial period of a few months – an obvious drawback for prospective clients.

Overall, co-branded gas cards generally provide better value for customers that fill their tanks regularly than universal cards, thanks to fewer limitations on earning potential. The two universal cards, while offering 3% and 5% back on gasoline purchases at any retailer, limit top rate earnings to $15 and $5 per month respectively. Thereafter, all gasoline purchases earn rewards at the standard earnings rate; no such limit applies to most co-branded cards, which instead allow users to earn upwards of 5% back on all purchases at their specific retailer’s locations.

Most issuers did not adequately promote the earnings potential of their gas cards. Only one firm includes either potential earnings calculators or charts on their cards’ product pages, and even that issuer fails to offer these for each of its cards. Additionally, one other firm provides little information about redemption mechanisms to prospects, forcing them to either scour the Internet for further information or simply assume that a given rewards program is worthwhile.

The report also elaborates on the following key findings:
 

  • Based on card purchases of $200 per month, with half spent on gasoline, 47% of cards allow clients to earn $60 or more in the first year of card ownership
  • Eleven cards offer accelerated earnings of double or more for the first few months a card account is open
     

Subjects

Marketing, cross-selling

Segment: Credit Cards
Publication date: Tuesday, August 12, 2008
# Pages: (40 pages)