The third annual benchmark report from iSeatz shows North American card-issuing banks expanding their rewards portfolios beyond travel.
NEW ORLEANS – iSeatz, a leading provider of travel loyalty technology and digital commerce solutions, has released its 3rd annual State of Loyalty Credit Card Rewards report. Chief among the report’s findings is a broad-based trend toward expanded rewards portfolios, reflecting a credit card loyalty ecosystem striving to offer more value to cardholders and achieve differentiation through unique redemption opportunities in a crowded marketplace.
The annual report, which analyzes the rewards programs of the 25 largest and most prominent credit card issuing banks in North America according to the types of benefits offered to cardholders in the last 12 months, serves as a yearly benchmark of redemption frameworks and engagement strategies in the financial services sector.
“Our analysis finds that as the ‘big three’ travel rewards become table stakes for major credit card rewards programs, more issuers are expanding the constellation of rewards that can both complement these core offerings and offer value to cardholders in their day-to-day lives,” says Dave Parsons, Chief Customer Officer of iSeatz. “It’s no coincidence that these developments are occurring as banks are facing a multitude of competitive challenges. Giving cardholders more choices and a broader selection of lifestyle rewards is one way that card issuers can differentiate themselves and capture more share of wallet.”
The report also identifies several other trends in the credit card rewards landscape, specifically relating to travel loyalty.
Experiential Travel Rewards Remain Popular
According to our analysis, most credit card programs already include the “big three” travel rewards – flight (100%), hotel (92%), and car rental (92%). However, this year’s report captures that the most significant increases in redemption options are lifestyle rewards designed to complement travel, allowing cardholders to use points to enhance their trips.
- For example, 76% of the cards in the analysis now offer point redemption or a statement credit for tours and activities, an increase of more than 20 percentage points over 2023 (52%).
- More than half (56%) of all card programs now offer live events as a reward, up from 37% in 2023.
- Almost a quarter – 24% – offer wellness-related redemption options, a significant increase from the 15% of cards that provided this reward type in 2023.
What do these reward categories have in common? They all fit naturally alongside travel rewards – it’s easy to imagine a cardholder redeeming points to take a tour, see a show, or book spa services while on vacation—and they reward cardholders for the way they want to live. The proliferation of these reward types is emblematic of the dominant trend in the State of Loyalty 2024: Credit Card Rewards Report expanding redemption options to deliver recognizable, usable value to cardholders.
Fuel Redemptions on the Rise
Similarly, many card programs have added gas discounts as a reward option this year. In 2023, just 15% of the cards in the report offered fuel rewards. This year, that proportion jumped to 36%—nearly a third of the programs analyzed, showing that card issuers are responsive to their cardholders’ economic conditions and concerns and the need to demonstrate everyday value.
Multiple Ways to Grow Portfolios
Credit card programs’ willingness to meet cardholder demand for value in more than just a few categories is also reflected in the fact that many card issuers expanded their portfolio with statement credits or gift cards this year. Sure, I can make that clearer:
Providing cardholders with rewards in the form of gift cards or statement credits can be a quicker solution than developing the technical systems needed to allow for the direct redemption of points in specific reward categories.
This approach enables issuers to rapidly expand their portfolio to stay competitive and meet consumer demand.
The latest analysis shows that credit card programs most frequently pursue this strategy in rewards related to charitable giving, dining, wellness, and gas. PNC Bank, for example, began offering both dining and fuel rewards through gift card redemption in 2023. American Express also added wellness rewards through gift cards this year.
“Offering rewards that complement both travel and cardholders’ lifestyles is a positive development, in our opinion,” continues Parsons. “We expect that card issuers will continue pursuing this portfolio expansion strategy and providing cardholders with added value and increasing reasons to engage with their programs.”
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
