The credit card industry is fighting for more share of a smaller pie. Consumers, concerned about their financial futures, have cut back on spending. Now credit card companies are battling one another with better rewards aimed at growing their base of cardholders.
Recent developments in the credit card space have made credit cards even more alluring for consumers. Citigroup is using its weight in the credit card industry to make an appeal directly at consumers with more reward options – in particular, Citi cards now give consumers the ability to redeem rewards points from LiveNation, one of the biggest ticket sellers in the country.
This move comes as American Express opens point redemption through Ticketmaster and Telecharge, two other brands in the event and entertainment space.
Other credit card companies see online retail as a way to grab new cardholders. J.P. Morgan, Discover, and American Express all offer the ability to redeem points for purchases at online retailer, Amazon.com. Once a customer has accumulated sufficient points, he or she can redeem their rewards as a discount on their purchase on one of more than one million products offered by Amazon. (The only catch: consumers cannot redeem points for Kindle software, apps, or books.)
The amount necessary to make a redemption is also on the decline. American Express, for example, now allows for redemptions through Ticketmaster and Telecharge once a customer has accumulated 2000 points. Typically, a point is equal to one cent, and most credit cards start redemptions at $50 of value. American Express effectively lowered their lower bound to $20 when a customer redeems his or her points for a show or concert from two of the biggest ticket vendors in the country.
Discover continues to add more redemption options. This summer, Discover opened up redemptions for Facebook credits, which can be spent like cash on popular Facebook apps and games like Zynga’s FarmVille or Mafia Wars.