The demand for customized credit card rewards programs has evolved in recent years — with Americans looking to optimize how they are rewarded for spending.
During the pandemic, credit card spending took a significant dip, with food and services spending dropping the most, but according to the Bureau of Economic Analysis, credit card transactions are close to surpassing pre-pandemic levels.
The elevated level of spending on credit cards means rewards are also flowing for millions of Americans, and tailoring that experience has become even more important to keep cardholders.
“The rewards landscape continues to get more robust, so the consumer is expecting more and more,” Courtney Gentleman Schill, chief marketing officer of Synchrony’s digital platform, told Yahoo Money.
Many credit cards will offer incentives of a certain percent cash back on every dollar you spend, while other cards focus on allocating points per dollar spent. According to Nerdwallet, most cards offer 1% to 6% cash back, and points can range from 1 to 10 earned per dollar spent.
“I think the biggest shift has been to cards that offer some level of flexibility,” said Nick Ewen, senior editor at The Points Guys. “Sure, a credit card affiliated with a specific airline or hotel chain can offer some nice perks, but what if you’re not planning to take any trips with said airline or hotel? Earning rewards that can be put toward travel and other items is much more appealing.”
For instance, the Citi Custom cash card offers 5% cash back on your biggest spending category each month and automatically changes each billing cycle. The Bank of America Customized Cash Rewards card, and the U.S. Bank Cash+ Visa Signature card offer similar rotating rewards, but those have to be opted into and managed every month.
When Venmo released its first credit card last year, it also took a big step in hyper-customization and tailored rewards. The Venmo card offers automatic rotating cash back rewards based on the category you spend the most money in, also without requiring the cardholder to enroll, opt in, or watch for different boosted categories. The card offers 3% on your top category, 2% on the second highest, and 1% on all other categories with a spending cap of $10,000, higher than most rotating benefits cards.
The intuitive nature of the Venmo credit card and its integration directly into the existing Venmo app, make it a unique all-in-one experience.
“Most issuers recognize the incredible potential that these cards have in driving consumer behavior, so they’ve taken a variety of steps to become even more appealing,” Ewen said.