+ Discover What The Geeks Know That You May Not
- Mile Value: Comparing Fixed Value Bank Points
- Frugal Travel Guy: What Credit Card Points Are Worth
- Tthe Points Guy: How Amex Awards Points
- Mile Value: How Citi Bank Points Work
- Travel Is Free: What Credit Cards Transfer Points To Miles?
- Frequent Miler: Practice Makes Points
- View From The Wing: Basics On Proprietary Bank Points
Credit card companies vie over the “share” of consumers’ wallets in order to increase company profits. One of the major ways in which credit card companies have found success is using direct mail as their major marketing channel. In direct mail campaigns, credit card companies average about $80 for each new customer. The costs of marketing, and “processing” to acquire each new customer mean that almost all credit card offers involve a reward or a rebate incentive.
Banks pursue new customers and retain current customers based on the loyalty model that has proven to encourage more customer spending. Bank now offer products with built-in "stickiness" to entice and retain consumers. It is no longer just enough for credit card companies to attack consumer attention by competing on the cost of extended credit. Zero percent interest teaser offers no longer have proven to be worth the majority of customers’ time. Because of the competitive nature of the banking industry, credit cards have been forced to become more and more creative in reward and rebate schemes. Bank proprietary rewards points programs have become the modern day equivalent of walk home and finding a small bit of lost money on the ground with no one around to claim it. – Adapted from PBS