Americans love to earn rewards each time they swipe their cards, and when it comes to their favorite incentives, cash is still king.
Cash is preferable to other reward types because it gives consumers more spending flexibility. They can use the cash to go shopping, pay bills and utilities, buy groceries, put it in the bank or just save it for a rainy day. This can trump other points and miles rewards programs that limit consumers to specific airlines, retailers or gas stations.
Consumers can also calculate cash-back rewards
more easily than other programs. That allows them to avoid confusing reward conversions that may vary by company. Studies show the majority of Americans prefer cash-back rewards to other types of programs.
Cash-back offerings also drive consumers' spending and banking decisions. In a time when many consumers are switching to cash, a large percentage of Americans admitted they would use their debit cards more frequently if they were enrolled in a cash-back rewards program.
Banks offering cash-back reward options may also have a leg up on the competition, with more than 60 percent of Americans saying they would switch from their current bank if another institution allowed them to participate in a program that rewarded them with cash. An overwhelming 90 percent of Americans said that if their existing bank offered a cash back rewards program, they would quickly enroll.
Financial institutions have an opportunity to appeal to larger demographics and building stronger relationships with customers by offering them incentives for using bank-issued products, such as debit cards. These programs may have more appeal than credit products by eliminating the interest charges and other costs that can sometimes turn Americans away from credit lines.