Important Factors of Credit Card Reward Program- A Consumers' Perspective in New Economy

Credit Card industry which has recovered from the aftershocks of global meltdown in new economy has changed drastically. As the industry slowly recovered consumer preferences also changed. Consumer which preferred low interest rates and charges now focus on having mutually beneficial relationship with the credit card issuers. Reward programs have emerged as an important tool for a long term association between the cardholders and card issuers in the new economy. Rather than having multiple cards as before, cardholders have now consolidated their spending into a single card which offer them valuable rewards. Card issuers have further customized the reward program to suit the different needs of customers and create more value. Thus it is very important to study customer preferences for credit card reward programs in this ever changing new economy. The purpose of this research paper is to determine important factors for credit card reward program and to explore credit card usage behavior. Variables are adopted from a study conducted by O’Brien and Jones (1995). Five factors Cash value, Redemption Choice, Aspirational Value, Relevance and Convenience have been identified. The sample was selected from the National Capital Region of Delhi because consumers have greater exposure to credit cards. This study based in India has relevance because of changing consumers’ preferences and usage behaviour in the new economy.