June 17, 2010

RBC credit card rewards grocery purchases

TORONTO--RBC Royal Bank of Canada has launched a cash back reward credit card offering 5 percent cash back on grocery store purchases until December 31, 2010. The standard cash back rate on the new RBC Cash Back card is 1 percent on purchases..

“The RBC Cash Back card lets you spend your cash back however you want, for example to reduce your outstanding balance,” says Anna Judek, RBC’s senior manager, rewards cards. “This is different to Wal-Mart’s new Canadian credit card, the Wal-Mart Rewards MasterCard, which only lets you redeem your reward points for money off purchases at WalMart.”

With the new Wal-Mart card, cardholders earn 1.25 percent of their purchases in Walmart Rewards for virtually every dollar spent at Walmart Canada and 1 percent of their purchases in Walmart Rewards when used elsewhere.

The RBC Cash Back card includes EMV chip-and-PIN security as well as Visa payWave contactless technology.

Judek says market research carried out on RBC’s behalf found that 33 percent of Canadian credit cardholders prefer cash back over any other type of incentive, including free merchandise (27 percent) and travel rewards (23 percent). “We found that people really want simple rewards programs, without complex spending tiers,” she says. “They also want a simple application process for credit cards.”

The survey, which was carried out by Ipsos Reid in May 2010, also found that Canadian families spend on average C$628 at the grocery store each month. The majority (53 percent) use their debit card at the cash register, with the others split between using cash (21 per cent) and credit cards (26 per cent) to pay for groceries.

RBC thinks its card’s 5 percent cash back on grocery spending will prove popular in the current economic climate. “There’s no doubt that rewards programs are becoming more important these days as a way to help consumers reduce their expenditures,” says Judek.

Cash back credit cards appeal to savvy consumers who can consolidate most of their credit card spending on the card, including reoccurring payments such as utility bills, and then pay off the balance before the due date, Judek says.

To encourage people to pay all their bills via the RBC Cash Back card, RBC is offering CustomSwitch, a service which helps cardholders transfer all their reoccurring payments to the card. A bonus of C$5 is payable for each payment switched, with a maximum bonus of C$25.




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