New Credit Card Rewards Model. Blueprint for Canada?
It’s time for Canadians Banks to reward Credit Card customers differently, and we think we’ve found a geat model. Citibank Hong Kong has launched a global credit card known as the Citi Prestige Card, offering cardholders Rewards based on the depth and tenure of their banking or credit card relationship with the bank. Cardholders can earn an extra 30% in Annual Relationship Points the longer they’ve been with the Bank or the longer they’ve had their credit card.
We think this would be a great value proposition for Canadian Banks to offer their best customers as well. For each year a cardholder either maintains their core banking or credit card relationship with the bank they either earn additional points for every dollar spent, or earn a tiered bonus at year end based on their tenure with the bank.
For example, if you’ve had a relationship with a bank for 5 years, instead of getting 1 point per dollar spent, you would get 1.05 points per dollar spent. At 6 years, you would get 1.08 points per dollar spent, etc… This can also be done for things like having additional relationships with the bank. For example, if on top of your checking account, you then get your mortgage and investor trading account at the same bank, instead of getting 1 point per dollar spent, you get 1.5 points per dollar spent. Banks can do this for any rewards program, including Aeroplan, Aventura, Air Miles, Avion, First Class, etc…
We’ve seen some banks, like TD, waive credit card annual fees for customers with premium checking accounts. Perhaps it’s time not only the banks wealthiest, but also it’s most tenured get rewarded for their loyalty. Seems like a win-win for both bank and customer.
If you like the idea, retweet the article and/or post it on facebook. Let’s see if we can’t give one of the banks the confidence to play ball. We will take the crowdsourced feedback and propose the idea to one of the big 5. Let’s see if we can make a difference!