Loyalty Programmes
In some ways, credit cards have not changed very much since the mid-1950s. In other ways, however, the system has changed dramatically. One of the biggest changes between credit cards of today and those of the mid-1950s is the use of loyalty programmes. The following are some of the loyalty programmes you may come across in use in the UK credit card industry today:
Cash Back
Cash back credit cards give cardholders cash rewards when they make a purchase using the card. Typically, UK credit card providers offer the following:
- an introductory rate (of 2-3%) during your first 3 to 6 months that is higher than the standard cash back rate
- a standard cash back rate of 1% once the introductory period has expired
- higher rates at selected outlets
- progressive threshold cash back rates; e.g. spend £500 and get 1%, spend £1,500 and get 1.5%, etc
Rewards
By far the more popular credit card loyalty programme. Under this system, a credit card provider offers a certain number of rewards points per threshold amounts spent using the card. So, the more you spend, the more rewards you receive! You then have a certain period within which to exchange your reward points for gifts. Usually the gifts you can select from, which may include air miles, and the number of reward points it will cost you to exchange for the gift can be found in a catalogue sent to you by the credit card provider.
Discount credit cards
Similar to cash back credit cards, discount credit cards give cardholders discounts at selected outlets that are members of the programme.
Charity credit cards
This type of credit card loyalty programme makes a donation to your favourite charity with every purchase you make. Typically donations are a percentage of your purchase price (with some threshold ceilings). Very popular credit cards include the World Wildlife Fund and Oxfam.
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