SA's only survey on credit card value releases ratings
For the second consecutive year, the Discovery and SAA credit cards have come out tops in the country's only survey that rates credit-card value.
The SAA Voyager Premium card is the country's most valuable standalone credit card and the Platinum DiscoveryCard is the most valuable card overall, according to the Value in Credit Cards 2007 survey, the results of which were announced today. Razor's Edge Business Intelligence, a Johannesburg-based consultancy and research company, undertakes the annual survey.
The SAA Voyager Premium card is one of a suite of three credit cards launched by the airline in 2006. The Platinum DiscoveryCard has been on the market for three years. It is linked to various other Discovery products, among which is the Vitality wellness program.
Twenty accolades were awarded accolades in the research work. Evaluations were done in six card-spend ranges, for both standalone and linked cards.
"There weren't too many surprises in the findings," says Bruce Conradie*, MD of Razor's Edge Business Intelligence. "We were not surprised to find the Vodacom card did well (it was launched too late to be rated in the previous survey.
"And the DiscoveryCard retained top spot, especially in the top two spend categories, where the margins between it and the next most valuable card were wide."
"One interesting result was the Pick n Pay Go Banking credit card taking top spot in the lowest spend category. It highlights the value offered by a card not charging annual fees. However, once consumers start spending more, those cards that offer loyalty points and other rewards become far more valuable than the no-fee cards."
As was the case with previous surveys, the 2007 survey shows that consumers can get excellent value from their credit cards. All cards provide interest-free credit (provided cardholders make the full payment due each month). They also provide comparatively good rates of interest on positive balances. In addition, many cards offer extensive value-added benefits, among which are free travel insurance, loyalty points, frequent flyer miles, and discounts or rebates on airline tickets, car hire, and retail products, among others.
Eventful year
It was another eventful year in the card industry, with the rollout and implementation of the National Credit Act (NCA). The number of cards that met the survey criteria contracted from 99 in 2006 to the current surveys 84. This was largely a result of product range consolidation on the part of Absa. In 2006, it had 32 rated card products. This has been reduced to 13.
Moreover, the Bestmed and Telemed credit cards are no longer being issued.
In the 2006 survey, these cards were joint winners of the one of the spend categories.
The full set of accolades awarded in the survey is:
Most valuable standalone credit card
The top three "Most Valuable Standalone Credit Card" in each spend category are:
R500 spend category
• Go Banking Gold
• Absa Student
• Woolworths Silver
R1500 spend category
• Go Banking Gold
• Woolworths Silver
• Absa Student
R3000 spend category
• Virgin Money credit card
• Woolworths Silver
• Clicks ClubCard Smart
R6000 spend category
• SAA Voyager Premium
• Kulula Smart
• Woolworths Silver
R12 000 spend category
• SAA Voyager Gold
• Woolworths Gold
• Standard Bank BA Gold
R24 000 spend category
• SAA Voyager Premium
• Standard Bank Platinum
• Woolworths Gold
Most valuable credit card
The top three "Most Valuable Credit Card" in each spend category are:
R500 spend category
• Go Banking Gold
• Absa Student
• MTN Gold
R1500 spend category
• Gold DiscoveryCard
• Go Banking Gold
• Woolworths Silver
R3000 spend category
• Vodacom Silver
• Gold DiscoveryCard
• Virgin Money credit card
R6000 spend category
• Platinum DiscoveryCard
• SAA Voyager Premium
• Vodacom Smart
R12 000 spend category
• Platinum DiscoveryCard
• SAA Voyager Gold
• Woolworths Gold
R24 000 spend category
• Platinum DiscoveryCard
• SAA Voyager Premium
• Standard Bank Platinum
Highest-Value credit card
Overall, the highest-value card-across all spend profiles-in each of these accolade categories is:
• Highest-Value Standalone Credit Card – SAA Voyager Premium
• Highest-Value Credit Card – Platinum DiscoveryCard
About Value in Credit Cards 2007
Value in Credit Cards 2007 is the third iteration of an annual survey of South African credit cards. Profiled in the report are 84 credit cards and 20 card issuers (banks and co-branded card issuers).
• Cards profiled – 84
• Spend Categories – 6
• Account management types – 10
Changes made the survey methodology, since the 2006 survey, include:
• The ratings now account for defaulters (cardholders who fail to pay their accounts on time, or who have returned payments)
• The number of spend categories was increased from five to six
• The ratings now account for the probability of an individual adopting a specified account management approach (for example, a high percentage of cardholders do not pay the full amount due each month, whereas very few cardholders use their cards as a savings vehicle).
• The accolades now recognise the top three cards in each spend category, whereas this was previously only the top card.
About Razor's Edge Business Intelligence
The company is a provider of business intelligence and consulting expertise, with a specialisation in loyalty marketing.
Loyalty marketing includes the use of points-based rewards programs, customer clubs, discount programs, customer retention programs, and customer experience management. The company's research reports include proprietary, syndicated, and open surveys.
The company was founded in 2003 by marketing consultant Bruce Conradie and is based in Johannesburg, South Africa.
*Bruce Conradie is Managing Director: Razor's Edge Business Intelligence, which provides consulting services in the fields of customer loyalty, membership marketing and relationship marketing.
