Both shoppers and American Express are reaping the benefits of the increasingly popular companion card concept. The setup offers both an American Express card and a Visa or MasterCard for the price of one.
Shoppers can swipe their American Express to maximize their points earned, or use their Visa or MasterCard in places which don’t accept American Express, or only do so with a surcharge. The main benefit: two credit cards with only one account, one annual fee and one due date.
The concept of this American Express companion card has become progressively more popular with both consumers and banks; with all four major banks now promoting the offer. Whilst there are a number of benefits for the owners of the companion card, American Express has also gained the upper hand.
Marketshare research showed that American Express/Diners Clubs’ monthly transaction value increased by 2.3% in the past twelve months; which is very likely attributable to the increased existence of the companion card offer across a wider variety of banks.
The American Express monthly transaction value had declined during the GFC, so the introduction of the companion card seemed to tie in well with increased consumer spending post the GFC.
Get the best bang for buck in credit card rewards
Naturally you want to earn maximum value when you redeem your credit card reward points. The CANSTAR methodology report shows that the type of rewards you redeem for your points can have a significant effect on the dollar value that you receive back. Our rewards methodology calculates Reward Return (RR) analysis on 8 different categories (see below).
The benefit in cash rewards is that you can source and buy your own preferred brands, rather than the brands partnered with the rewards program. Additionally, you can search for your own deals, and buy goods for less than the RRP prices offered by the reward vouchers.
However, as you can see from the graph, cash is the least efficient way to redeem your rewards. Banks can get cheaper deals with their rewards partners for vouchers or merchandise than they can on cash, and therefore vouchers, merchandise and travel prove to be much more value for your dollar.