Customers prefer cards offering cashback or reward points

A recent study of UK consumers by Morgan Stanley has revealed that many customers are more interested in credit cards offering cashback or rewards than those offering 0% interest on balance transfers.

In recent months the number of customers attracted to 0% deals has declined, mainly due to an increasing trend by card issuers to introduce uncapped fees to switch a balance.

The report found that 17% of UK cardholders have a credit card that has a 0% interest offer, compared to 21% that have cashback facility. A further 30% have cards in their wallet which reward them with points for spending. The points can be redeemded in high street stores.

The Morgan Stanley study found that consumers in the over-50s age bracket are more likely to take advantage of a reward-based card as they are less likely to need to shift debt around on balance transfer deals.

Patrick Muir, marketing director for Morgan Stanley Credit Cards said: 'We are seeing a shift in the dynamics of the credit card market as cardholders wise up to the long-term benefits of reward cards and turn their backs on short-term offers. Millions of cardholders are taking advantage of loyalty schemes for everyday spending, with these cards least likely to be lying idle in wallets."

A further study undertaken by Mastercard has confirmed the findings of Morgan Stanley. They found that 73% of European consumers would like a credit card which offers rewards such as city breaks, free cinema, concert or theatre tickets.