The findings reveal that the cost of rewards programs is compensated by higher engagement combined with the increased interchange and fee income associated with rewards cards. Although the expenses studied were significantly higher on rewards cards (71%), the income earned by interchange, interest and fees on rewards cards was 76% higher than the income generated by non-rewards programs.
Furthermore, cardholders who redeemed their points spent on average roughly USD 890 per month, nearly triple (186%) that of their non-redeeming counterparts. Average balances, too, were higher among redeemers, who generally carried a balance around USD 3,000. This is 55% higher than balances carried by rewards cardholders who did not take advantage of the points they earned.
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