TORONTO, June 2, 2010 One size does not fit all Canadians when it comes to credit card reward choices. A recent RBC poll shows that one-third (33 per cent) of Canadian cardholders prefer cash back over any other type of incentive, including merchandise (27 per cent) and travel rewards (23 per cent).
"While travel and merchandise rewards remain popular, many Canadians just want the simplicity of a reward card that automatically gives you cash back toward everyday purchases," said Sean Amato-Gauci, vice-president, RBC Credit Cards.
RBC's payment survey conducted by Ipsos Reid, found that more than half (58 per cent) of Canadians hold a credit card with some type of reward program. Nine-in-ten credit cardholders (89 per cent) say they pay for travel using their card and more than half (56 per cent) use it to pay for retail purchases. Fifty-two per cent indicate they use their credit card for dining, entertainment or gas purchases, while a third (35 per cent) use it to pay for drug store purchases.
The survey also found Canadian families spend on average $628 at the grocery store each month. The majority (53 per cent) use their debit card at the cash register, with the others split between using cash (21 per cent) and credit cards (26 per cent) to pay for groceries.
"When looking for a cash back card, it's also important to find a card that makes it easy to use your rewards," noted Amato-Gauci. "Having to join a club, track points or tiers and remembering to redeem your rewards can make it more difficult to take advantage of the benefits that the card offers."
The RBC Cash Back card offers the following features:
The RBC Cash Back card tracks rewards on the cardholder's monthly credit card statement and pays out the cash back at the beginning of each year. A cardholder that spends $628 a month on groceries using their RBC Cash Back card this year would earn a five per cent cash back rebate of $31 monthly. This rebate is in addition to the one per cent benefit cardholders earn on all other purchases. To find out more about calculating rewards, consumers can visit www.rbcroyalbank.com/cashback to try the RBC cash back calculator.
Amato-Gauci provides the following tips for optimizing credit card rewards:
Put your monthly payment on autopilot - Choose a card that allows you to set up a monthly payment that automatically pays off your entire balance, the minimum payment or a set amount each month. By using your credit card for every day purchases and paying it off at the end of the month, you will earn cash back rewards but not pay any interest.
Don't spend more, spend smart - If you never carry a balance and always pay your bills on time, you can actually make your rewards card work for you rather than against you, by using it frequently for all kinds of purchases and expenses. Many people rely on their credit cards for larger purchases but may not use it for everyday shopping instead of using cash. Groceries, gas, or drugstore purchases add up quickly and may earn rewards at a higher rate than some other categories of spending. You can also use your card to "flow through" monthly expenses such as utilities (hydro, cable and phones) daycare, tuition, gym memberships and newspaper subscriptions, to bump up your rewards.
Consider insurance benefits - A card feature that is often overlooked is purchase protection which insures against loss, theft or damage up to 90 days after purchase. Another valuable feature is an extension of the manufacturers' warranty period which can provide additional protection for larger ticket items such as home electronics or appliances.
Double dip if possible - Certain retailers let you earn points for purchases in their own reward program or in other independent programs. If you are a member of these programs, you can present your program card to the retailer to earn the applicable points, while at the same time earning cash back rewards by using your credit card to pay for the purchase.
Look for rewards that offer convenience - With some reward programs, points expire so you need to remember to use the points or call the card issuer to request your rebate. Others send your rebate to you when you hit a certain threshold or credit your account automatically at the beginning of each year. Either way, it makes sense to use a card that gives rewards without any prompting from you.
The survey findings are from an RBC omnibus conducted by Ipsos Reid between May 14 and May 17, 2010. The results of the online survey are based on a sample where quota sampling and weighting are employed to balance demographics and ensure that the sample's composition reflects that of the actual Canadian population according to Census data. A survey with an unweighted probability sample of this size and a 100 per cent response rate would have an estimated margin of error of ±3.1 percentage points, 19 times out of 20, of what the results would have been had the entire population of adults in Canada been polled.
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For more information, please contact:
Media Relations, 416 974-2124
Jacqui van der Jagt,
Corporate Communications, 416 974-1756