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An Overview of the 2022 Travel and Lifestyle Credit Card Rewards Landscape

If there’s one thing we’ve learned over the past two years, it’s that it’s become impossible to predict the future, especially when it comes to consumer spending trends. Covid-19 caused a massive shift in credit card spending in 2020, shifting dollars that could have been spent on travel and in-person experiences to grocery delivery, takeout, gas and streaming. However, the tide has changed in 2021 as pent-up travel demand and the easing of lockdown restrictions have pushed up travel spending across all categories, including flights, hotels and car rentals.

Changing spending habits have prompted many credit card issuers to modify and expand the ways customers earn points and rewards, especially for lifestyle products. However, there is room for improvement – ​​and opportunity – when it comes to how consumers can redeem points for the same products.

“We’re seeing bookings well above 2019 levels across all major travel categories. Travel rewards are and will continue to be in demand, but there are changes in customer behavior that shouldn’t be ignored. said iSeatz Founder and CEO Kenneth Purcell.

How can reward programs meet these changing needs? Purcell explained that “leisure travelers have been the majority for two years. So while a business traveler might have used points on upgrades and lounge access in the past, a vacation rental and food or grocery delivery are what travelers are looking for now. Lifestyle products are a great addition to a travel rewards portfolio to allow brands to expand their customer base and provide more personalized offers.

To help business leaders develop an effective redemption strategy for travel and lifestyle rewards in this new consumer landscape, iSeatz has launched its new “State of Loyalty: 2022 Credit Card Rewards Report”.

iSeatz’s Benchmark Report provides an overview of rewards redemption opportunities in the market, outlines the engagement strategies of key travel and lifestyle players, and explores the most promising trends. Here, SkiftX presents the main themes and conclusions of the report.

Comparison of rewards exchange offers

Financial institutions in the United States are increasingly moving toward a diverse rewards portfolio that includes both travel and lifestyle options.

The report explains the different elements of credit card programs, such as offers, benefits and cashback, and compares the financial benefits, redemption opportunities and integrated points products of 27 issuers. The analysis shows that lifestyle rewards redemption choices remain somewhat limited, despite the growing range of point opportunities.

Buy now Pay later

The ability to pay for goods, services and experiences in installments has been digitally upgraded in recent years, with new Buy Now Pay Later options that provide access to monthly, bi-weekly or weekly payments directly at the time of purchase. payment, often without interest.

The report provides an overview of the Buy Now Pay Later market status, including expected growth, key players, consumer groups and companies driving the trend, and strategies of major card issuers credit. It also highlights the contrast between the growing interest in Buy Now Pay Later and the increased importance of financial savings.

Pay with points

In late 2019, financial institutions began partnering with retailers such as Amazon, Apple, and Best Buy to allow shoppers to redeem credit card points at checkout.

The report highlights three reasons why this trend continues to grow and why it’s a win-win situation for issuers and consumers.

Digital Wallets 2.0

Once a faster and easier way to pay using a smartphone, digital wallets are now transforming into aggregators of various digital assets, including rewards points from loyalty programs, gift cards and crypto- cash.

The report outlines the evolution of digital wallets from the first-mover Points.com to the current two major players, PayPal and Bakkt, and outlines the benefits and potential pitfalls of integrating loyalty programs with these aggregators.

Cryptocurrency rewards

The overall value of the cryptocurrency market is approaching $3 trillion. Since last year, more than 40% of deposits have come from new investors who may not have a high level of knowledge about cryptocurrencies, but are attracted by the potential for short-term gains. Credit card issuers have an opportunity to enter the space by offering cryptocurrency rewards.

The report describes the first strategic partnerships entered into by Visa and Mastercard, respectively with the crypto platforms Coinbase and Bakkt, and explains the continuous growth of the global cryptocurrency market: several countries have announced or are in the process of developing digital banking currencies central, and according to Independent Community Bankers of America (ICBA), “Forty percent of Americans who have heard of cryptocurrency believe it will be widely accepted as a form of payment within the next 10 years.”

Perennial reward strategies

The world today is much more unpredictable than it was two years ago. In such a fluctuating environment, the best approach is the most flexible. The same lesson applies to credit card issuers and the companies that partner with them. Using a flexible and diverse engagement strategy to stay relevant and meet changing consumer needs is what will deliver value now and in the future.

As Purcell explained, “opportunities to earn points for meal delivery, media streaming and grocery shopping will continue to be relevant to consumers beyond the pandemic, but as we have seen last spring and summer, demand for reward travel remains strong.The integration of redemption for trending travel products like live events, wellness and vacation rentals will provide points contact cards for cardholders to plan their dream vacations, while solutions like Buy Now, Pay Later, will help make those trips more accessible.

This content was created in collaboration by iSeatz and Skift’s branded content studio, SkiftX.