The battle to acquire cardholders is being won by issuers who use rewards as ammunition. Both Visa and Mastercard report card growth in the low double digits, with the lion’s share of that coming from reward cards. It’s no secret that Americans love their reward cards. According to Brian Riley of The Payments Journal, more households have credit card rewards than have 401k plans. And the rewards continue to grow. In 2008, the average credit card bonus offer was 16,050 points. Today, the average offer is 40,556 points.
There are several credit card products, each one suited to a different type of cardholder. There are cards that offer balance transfer promotions, to encourage revolvers (cardholders who carry a balance) to become their cardholder. There are secured cards, for thin/no file members who want to establish a credit history. And then there are cards for transactors – cardholders who want to maximize spend on credit cards to maximize rewards. It is this demographic that affluent cards are made for. And this demographic is highly desirable, with an average household income greater than $100,000, they also account for 20% of the population, but 60% of the total card spend in the U.S. These cardholders seek the best rewards for minimal or no annual fee. Credit unions can profit from these members by offering affluent cards.