Why compare credit cards with loyalty cards?

The UK is probably one of the most important loyalty card markets. As many as 85% would not compare credit cards with loyalty cards: they would just get both cards. The loyalty card or reward card as it is known in other countries, started during the mid-90’s when e-commerce started developing. Obviously, this threatened retail stores because customers would rather shop online than go personally to their store which is usually easier and less time consuming. Loyalty cards originated in the United States and Tesco in the UK started a similar scheme and other retailers soon followed suit.

When people compare credit cards with loyalty cards, they would instantly think that credit cards are used for purchasing at any retail outlet, while a loyalty card is  simply for identifying that the cardholder is a member of a loyalty program.

But the question is; why compare credit cards with loyalty cards? At first glance, a credit card and loyalty card is the same as both are used to pay for purchases. There are several kinds of loyalty cards and the most common ones are those issued by supermarkets which offer a number of points for every pound a customer spends. These points then mount up so that after a given time, these can then be converted into vouchers that can then be spent in the retail outlet.

When people compare credit cards with loyalty cards, they think that a loyalty card does not really consume money than when one maintains a credit card. That is highly incorrect as most analysts note that loyalty cards influence the behaviour of the consumer to buy more products instead of buying only what is needed, through discounts and the like.

When consumers compare credit cards, they choose those that have a wider scope, like AOL loyalty credit cards which is generally a loyalty card and credit card in one; which leaves no room to compare credit cards with loyalty cards.

On the downside, some people, usually the critics, when they compare credit cards with loyalty cards, think of the latter as bribes to manipulate and eventually, to retain customer loyalty. Credit cards rarely give out much equivalent rewards than the regular and most used loyalty card, which is found in supermarkets.
Usually, most people worry more about their loyalty cards than their credit cards. This attributes to an event during 2004, when a key ring-card was left behind at the scene of the crime; which eventually led to the criminal. Security and protection is what most credit card holders look for when they compare credit cards. And that incident led to the realization that they - the loyalty card holders - can be analyzed and tracked. And since then, security and protection has become a factor when people compare credit cards with other kinds of cards.

To compare credit cards therefore with loyalty programs is like comparing a famous movie actress with another that is equally famous. In a sense, they are the same, but underneath, they are different.