Valuing the credit card

The survey profiles South African credit card issuers and their card products and evaluates the value of their products to their customers. For high status cards (Platinum cards), these returns can approach R10 000 a year for the cash value of card only. These comprise interest free credit, free travel insurance, loyalty points, frequent flyer miles, affinity awards, and discounts with selected partners.

A total of 59 credit card products are profiled (made up of each unique combination of card issuer, card name, card status level, and card association).

To be included in the survey, a card had to be a credit or charge card (not a debit or cheque card) and available to the general public with little or no restrictions other than the common criteria, such as, creditworthiness.

Of the 59 cards surveyed, 5 are Amex cards, 39 MasterCard, and 15 Visa. Two-thirds of the cards offer a link to a loyalty programme and one-third offer affinity benefits. This is not to say that all cards offer either a loyalty programme link or affinity awards because some cards offer both and some cards offer neither.

Cards offering formal discount programme benefits or discounts as part of the core product package number 43. Most of these are MasterCard cards, which benefit from the MasterCard 4More programme run by the card association. The other notable discount programme provider is Discovery with rebates offered for purchases made at DiscoveryCard partners.

The survey rates cards according to their value to members. The most valuable cards in each of four card classes (Base, Silver, Gold, and Platinum) were identified. To members of the Discovery Vitality programme, the most valuable card is the DiscoveryCard. The DiscoveryCard comes in Silver, Gold, and Platinum status levels. For consumers who do not belong to Vitality, the most valuable cards in each class are:
Base class Absa Provincial Rugby and Absa Springbok Rugby
Silver class Standard Bank Gold British Airways
Gold class Nedbank Green Gold, Nedbank Arts Gold, and Nedbank Sport Gold (jointly)
Platinum class American Express Platinum

Results of the survey analysis showed that cards have a wide range of total net cash values. Some cards offer high value to the cardholders and produced highly positive returns on card fees. Other cards yield negative total net cash values (that is, the convenience of using the card comes at a cost to the cardholder).

The Value in Credit Cards 2005 survey is available from Razor's Edge for R9 400 (VAT excl).