Transparency and simplicity are key when it comes to financial transactions. And as Benjamin Franklin puts it, “Diligence is the mother of good luck.”
But the intersection between credit products, regulation and marketing has created a clutter of information that is difficult to understand. Financial data, industry jargon and fine print often confuse people instead of helping them make informed choices. “Marketing obfuscation and inconsistency on the part of [credit card] issuers makes it difficult for consumers to accurately discern each offer’s net value proposition,” according to CardHub’s 2015 analysis of U.S. issuers. The website did find Capital One as having the clearest credit card application out of several big banks.
Are rewards programs headed for simplicity?
Simplifying rewards programs and making the terms easier to understand — consumer advocates say — can go a long way towards improving consumers’ purchasing decisions. Capital One recently commissioned a study to dig deeper into rewards card programs. What researchers at the Virginia-based bank found was that consumers want simplicity and straightforward data in their card statements and loyalty programs.
For instance, nearly 1 in 4 card holders (24%) believe it’s difficult to determine the value of the rewards they’ve earned with their rewards card. And 79% of card holders would rather use a single rewards card for all types of purchases — instead of using multiple cards. Another recent study found that more than half of Americans (53%) have been surprised by some kind of potential mistake on their credit card.
“Consumers should do their homework to learn what other benefits these cash back rewards cards offer,” says Kyle Taylor of The Penny Hoarder, a personal finance website, in a recent interview with byteclay.com. “For example, the Quicksilver card features the Capital One Wallet that sends real-time purchase notifications, captures receipts and digitizes and stores gift cards, helping you save time and take control of your finances.”
Improving the shopper’s experience
So will a leaner process, simpler data and a better cash-back program distinguish one card issuer from the next? Probably. It seems big players in the industry would be prudent to give customers what they want in order to increase loyalty and satisfaction.
Capital One is one of a few card issuers that are trying to improve the shopper’s experience in a business environment where less than 1 in 3 of card holders are satisfied with their rewards program. The same survey finds three ways to improve such programs:
1. Allow consumers to earn the same amount of rewards on everything they buy, everyday (54%)
2. Make earning rewards seamless (46%)
3. Remove limits to the amount of rewards shoppers can earn (30%)
Determining your reward card’s value
“The value in a cash back rewards card goes beyond the all-important earn rate,” says Taylor. “The Quicksilver card from Capital One has a straightforward 1.5% earn rate. But more importantly, it offers innovative, proprietary tools like Second Look and Capital One Wallet that deliver value by helping consumers save time and money while taking control of their finances.”
The Virginia-based bank is also incorporating a larger strategy — such as rolling out digital tools — to help consumers better manage their personal finances.
Earlier this year, Capital One introduced CreditWise, a free mobile app that lets people monitor their credit scores — the first such tool of its kind. And there’s also Second Look, a mobile alert system that identifies potentially mistaken or unexpected credit card charges and alerts customers. Finally, Capital One Wallet makes it easier for customers to keep track of their purchases in real-time.
If diligence is the mother of good luck, simplicity is its close relative.