financial services

Credit Card Rewards Pass Frequent Fliers

  • by April 21, 2009
creditcardFor the first time, more U.S. consumers belong to credit card reward programs than to airlines' frequent flier programs, according to the 2009 Loyalty Marketing Census from Colloquy, a Cincinnati-based loyalty marketing consultancy.


Membership in financial services reward programs has grown 77% in the two years since Colloquy's 2007 Census and now boasts 422 million Americans, according to the research. Airline frequent flyer programs now have 277.4 million members, up just 9% since 2007.

But "the party appears over" for what Colloquy terms the "Golden Age of credit card reward programs." Growth in financial services rewards will slow down in coming years, Colloquy predicts, as a result of the dramatic increase already experienced, the banking crisis, the recession, possible regulatory changes, portfolio consolidation and card issuers exiting the business.



The report cites a recent move by American Express to pay unprofitable cardholders $300 to close their accounts as "emblematic of the new reality for credit card marketers," adding that "additional forays into Total Relationship Banking, as evinced by the Citi ThankYou program, will also be put on hold until the dust settles."

Colloquy noted that some 75-80% of all credit cards now have reward programs compared with 50% just a few years ago. For debit cards, the figure has grown from just 10-15% to anywhere between 25 and 50%.

Following financial services and airlines, specialty retailers boast 191.3 million members in loyalty programs, followed by hotels (161.8 million), grocery (153.3 million), mass merchants (124.8 million), gaming (106 million), department stores (92.8 million), drug stores (73.9 million), fuel & convenience (51.2 million), restaurant (13.7 million), and car rental and cruises (10.7 million).

On a total category basis, retail (specialty, grocery, mass merchants, department stores, drug stores, convenience) has the greatest number of loyalty members, with 39% of the total pie, followed by travel and hospitality (airlines, hotels, gaming, car rentals, cruises) at 31% and financial services at 23%.

That total pie now numbers 1.808 billion memberships, having risen 25% in the past two years and 100% since 2000, according to Colloquy. The number of loyalty programs per household, meanwhile, has risen from 12 in 2007 to 14.1 today.

However, Colloquy noted that the number of active members -- those who "engage" in at least one activity during a 12-month-period -- was at 43.8%, up just slightly from 39.5% in 2007, with just 6.2 active memberships per household.

"The implication for marketers is clear," Colloquy states. "The era of growing membership rolls just for the sake of growth is over ... Loyalty marketers must now turn away from growing program size, and turn to growing program value."

A Colloquy white paper on the Loyalty Marketing Census is available free of charge at

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