Boston, MA
December 2005

U.S. Credit Card Reward Program Review


There has never been a more challenging time for the loyalty marketers of the U.S. credit card industry.  The market is nearly saturated with reward programs, and cardholders have become deal hunters.  There is very little or no differentiation among reward programs, and “giving more” seems to be the only way to compete.  So what can credit card issuers and loyalty marketers do to make their programs more effective in this competitive landscape?  Unfortunately there is no quick-fix magic loyalty formula.  This is rather a difficult task that requires creative use of customer information for segmentation and precise targeting, continuous customer communication and brand building, and fine-tuning of the program to make it more relevant to the consumers.  It also requires a disciplined approach to program cost management as it gets more challenging to sustain top-line growth.

Long gone are the days of the one-size-fits-all type programs that attract millions of consumers.  Consumers have increased access to information and are increasingly exercising their individual preferences.  This trend of information empowerment coupled with growing individualism strongly influences what they buy, how they buy, and where they buy”, comments Evren Bayri, Director of Mercator Advisory Group’s Credit Advisory Service.  “This is even more so for the younger generation, Gen Yers”, a segment that comprises those born in the late 20th Century, between the years 1977 – 1994.  “Gen Yers constitute the next large group of credit card customers, and marketers that understand them today can turn them into loyal cardholders tomorrow.  For example, their habits regarding media consumption are very different.  They spend more time on the internet than they do watching television.”

This report provides a discussion on credit card reward programs and the ways that marketers can improve them.  It includes a list of the loyalty and reward programs available from the U.S. top 50 credit card issuers.  It covers important loyalty issues such as including real-time rewards, local loyalty programs, coalition loyalty programs, and contactless technologies, and provides a discussion on loyalty programs such as the Wells Fargo Link, Wachovia Honors, Citi Thank You, and Nietech COMMUNITYsmart.

The report contains 21 pages and 6 exhibits.

Members of Mercator Advisory Group have access to this report as well as the upcoming research for the year ahead, presentations, analyst access and other membership benefits.  Please visit us online at

For more information call Mercator Advisory Group’s main line: 781-419-1700 or send email to