Merchants that cobrand rewards cards to build business are often connected one way or another to the travel industry, but they may not have much to worry about even though the Covid-19 pandemic has kept consumers close to home. Twenty-three percent of these cardholders think they’re getting more value from their cards these days and another 58% say the value has stayed the same, according to survey results released Thursday by CreditCards.com LLC, a New York City-based marketplace for credit card offers. The survey took place last week and included more than 2,500 U.S. adults, of whom more than 800 pay annual card fees.
This is despite the fact that airlines, hotels, and other travel-related businesses shut down or severely curtailed operations starting in March. That made it difficult to cash in free miles or free hotel nights.
The reason cardholders are so sanguine is that issuers are finding other ways to reward them while supporting annual fees that can run into hundreds of dollars annually, according to CreditCards.com. “Many of these credit card issuers have made really quick, smart adjustments to their value propositions, and their customers are responding favorably,” said Ted Rossman, industry analyst at the firm, in a statement.
Examples cited by CreditCards.com include efforts to reorient rewards to activities quarantined cardholders might find useful. American Express Co.’s platinum card, for example, offers up to $320 in statement credits through December when cardholders use the card to pay for streaming services or mobile-phone plans. AmEx also expanded a $200 Uber credit to cover Uber Eats, CreditCards.com found. The card’s annual fee is $550.
Well-known names in travel, including Delta, United, and Hilton, have increased rewards for grocery purchases and thrown in other incentives to maintain spending and “ward off cancellations,” according to the firm’s research.
Cardholders are also finding they can get the annual fees waived or reduced if none of the new incentives is appealing, though the survey indicates only about a third of consumers are aware of that option.
Travel-related rewards remain popular, with 23% of consumers citing them in the survey. That’s good for a tie with cash back for the number-one slot. “Accepted at most places” came in second, at 15%.