Frequent flyer points shape credit card use

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Velocity Frequent Flyer, the loyalty program of Virgin Australia, has released research into consumer attitudes toward credit card points and rewards programs.

The research revealed that Australian credit card use is motivated by loyalty rewards, with more than two thirds of respondents saying they will make a decision to buy an item based on whether they will receive points.

It also found that the most appealing loyalty rewards for Australians are frequent flyer points and store vouchers.

The research found:

68 per cent of research respondents who have a credit card that earns loyalty points said they are more likely to use a service or purchase a product because they will receive points.
The main reasons Aussie respondents chose to become members of loyalty rewards programs was to accrue points that they can exchange for store vouchers (64 per cent), and to accrue frequent flyer points they can use towards travel/flights (62 per cent).
The most appealing loyalty rewards to Aussie respondents were vouchers that can be redeemed in store (71 per cent) and frequent flyer points that can be used for flights and upgrades (66 per cent).
Generation Y, or 20-35 year olds, were the most point-hungry generation with 80 per cent of Gen Y respondents stating they are motivated to buy a product or service to earn rewards points versus 69 per cent of Gen X respondents and only 57 per cent of Baby Boomer respondents.
Generation Y were also the most active users of their points, where one in four Gen Y respondents said they redeem their points more than six times a year, versus only 18 per cent for both Gen X respondents and Baby Boomer respondents.

The findings have been released to coincide with Velocity’s Billion Point Giveaway campaign which will see the loyalty program give away an additional 15 per cent bonus points to consumers who transfer their eligible credit card and flybuys points into Velocity Points before 31 May.

Velocity Frequent Flyer General Manager Commercial Partnerships, Business Development and Financial Services, Jeroen van Son said Aussies are motivated by a desire to travel – and well.

“What came out strongly throughout this research is that Australians are genuinely motivated by earning loyalty points and overwhelmingly, they want to use them for flights and upgrades.

“We also discovered there’s a 29 per cent gap between Australians who are aware they can transfer their credit card points into another loyalty program such as Velocity, and those who actually have.

“This means a lot of people are missing out on getting something for nothing, which we know people love! But the Velocity Billion Points Giveaway runs until 31 May so there is plenty of time to take advantage of our generosity,” van Son said.

Velocity bonus points promotion and points calculator:

In addition to the 15 per cent Velocity bonus, ANZ is offering a further 35 per cent to their customers who transfer their points to Velocity – making a total of 50 per cent additional points.

Up to one billion Velocity Points are forecast to be transferred throughout the month, equating to around: 24,000 flights from Melbourne to Hong Kong; 90,000 flights from Sydney to Melbourne; or 100,000 flight upgrades.

Velocity has also launched a Points Calculator, designed to give members personalised insight into where their 15 per cent bonus points could take them and how to transfer.

The calculator enables members to select their current credit card rewards balance and summarises where those points could take them once converted to Velocity points, such as upgrades, reward Seats or flight vouchers.

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The research found:

Velocity bonus points promotion and points calculator:

Email the Travel Weekly team at traveldesk@travelweekly.com.au