Citi research: Australians demand more from their credit card rewards

Key findings:

• 70% of Australian credit cardholders think credit card companies need to adapt their rewards programs due to the impact of Covid-19.
• 53% of Australians would rather spend rewards on things other than travel.
• 81% of Australians think that there should be no limits on how they spend their points.

According to new research released by Citi Australia, 70% of Australian credit cardholders think credit card companies need to adapt their rewards programs in the wake of COVID-19.

Over two thirds of Australian cardholders believe that companies need to work harder to keep them as a customer, and one third of people think they are getting less value from their card today than they did pre-pandemic.

"In our changing post-pandemic world, consumer attitudes towards credit are rapidly changing, so the credit card industry needs to constantly innovate to keep up. Not only are we contending with a COVID-19 recovery, but a shift in demand as buy now pay later services take-off as an alternative to credit," said Choong Yu Lum, Head of Cards and Loans at Citi Australia.

These findings come as Citi re-launches the Premier Card, a credit card designed with a more flexible rewards program, so customers can reap their rewards in a way that best suits them. This includes the staples of our post-COVID lifestyle, like a greater points-earn ratio on online purchases or discounts on at-home delivery, to offers that work when we can travel regularly again, like complimentary airport lounge visits and international travel insurance.

"Our research showed that 81% of Australians think that there should not be any limits on how they spend their points, and we've tried to deliver a card that gives greater freedom to customers," Mr Lum added.

In line with this, Premier cardholders, and all Citi cardholders, are able to use their reward points to pay off any item and receive credit back on their statement, through the 'Pay with Points' feature.

"It's clear that consumers want credit card companies to work harder for them. In reflection of this, we have also lowered the annual fee of the card for existing and new cardholders. We are also offering new cardholders 130,000 rewards points when they spend $4,000 in the first 90 days from approval," Mr Lum said.

Evolving attitudes to rewards

When asked to identify how they like to redeem their reward points, 2 in 3 Australian credit cardholders say they save up their reward points for something big, and of those 20% save to take the family away on a holiday. One third of Australians are deliberately saving their points until they can travel again.

Additionally, 65% of customers indicated they use reward points for gift cards or retail vouchers and 55% indicated they redeem for travel related items.

"Even though travel has been limited over the past year, consumers are taking a long-term view and still want a card that will let them redeem travel rewards when international travel re-opens," said Mr Lum.

Attitudes to rewards also differ based on gender and generational divides.

Gen Z tend to redeem their points more frequently, with almost half redeeming at least once every 3 months and almost three quarters doing so at least once every 6 months.

Younger Australians (Gen Z and Millennials) prefer to receive dining out rewards than older Australians (Gen Y and Boomers), and they are also more inclined to donate their rewards to charities than older Australians (Gen Y and Boomers).

Almost 6 in 10 females are more likely to use their credit card rewards on things other than travel. Women are also more likely to opt for gift cards and cashback as rewards compared to men.

"There's no right or wrong way to spend your points. Consumers ultimately are asking for a card that gives them the option to spend their points in the way that suits their needs," Mr Lum concluded.