Payment Terms Defined: Rewards Cards

Rewards credit cards are on the rise again, thanks to banks that are trying to shift cardholders away from less-profitable debit cards.  

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Payment Terms Defined: Reward Cards

May 31, 2017

Payment Terms Defined: Rewards Cards

Rewards credit cards are on the rise again, thanks to banks that are trying to shift cardholders away from less-profitable debit cards. After a lull during the recent recession, banks are once again flooding mailboxes with credit card offers, and many of them carry those little extras that consumers have come to love: airline miles, travel points, free merchandise and cash back.

There are many different types of credit cards — "plain vanilla", premium, corporate, B2B —but rewards cards rank high in popularity with consumers. And why not? Who doesn’t love being rewarded for spending money?

According to the TSYS® 2016 U.S. Consumer Payment Study, rewards continue to be a powerful incentive. They were once again ranked as the most attractive card feature on consumers’ most preferred credit cards. The percentage of respondents who selected rewards was nearly 60 percent.

Rewards customers have become very savvy about and loyal to their favorite rewards cards, using them to their best advantage. Cash rebates top the list by a substantial margin. Many rewards card holders redeem for gift cards, while others value their travel rewards, which scored high on the list of non-cash type rewards programs.

Obviously, rewards card shoppers are ready to take full advantage of their credit lines, which can pay off for merchants by delivering more and higher transactions. Credit card customers are already known for spending more and purchasing higher quality merchandise because of the freedom paying with plastic gives them. Add rewards to the mix and you’ve got shoppers who are motivated to buy because each purchase adds to their accumulated points/miles/cash. Rewards cards are, for lack of a better term, the perfect storm for shoppers and merchants alike.

Of course, to benefit from all this, merchants must be ready to accept rewards cards — and for that, they need a merchant account. TSYS Merchant Solutions® can set you up with the best credit card processing solution that is best for your business: traditional retail, online, mobile and MOTO. Claim your share of the rewards card market by establishing your merchant account with TSYS Merchant Solutions today!

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