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School of Management Blekinge Institute of Technology
CREDIT CARD REWARD PROGRAM IN SINGAPORE: THE CONSUMERS’ CHOICE
By: Ng Hui Chen Ivy
Supervisor: Anders Hederstierna
Thesis for the Master’s degree in Business Administration
Spring 2009
Credit Card Reward Program in Singapore – The Consumers’ Choice
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ABSTRACT
The credit card market in Singapore is a concentrated one with local players and their
foreign counterparts all vying for a share of the local market. Card issuers are constantly
looking for new alternatives to attract new customers and entice existing ones to use their
cards. At the same time, consumers are demanding more value from their cards. It is no
longer sufficient for card issuers to compete on the basis of rates and charges alone. Reward
program has emerged to be one of the solutions to create further customer value.
Reward program has become so widespread that it is no longer considered a “bonus” to
credit card holders. Instead, it has evolved to become a “requirement” in their choice of
credit cards.
As the expectation of reward program rises, card issuers have to take a step further by not
only providing attractive rewards, but, customizing them to suit the different needs of their
customers. Issuers need to adopt a market-oriented strategy to understand customers’
needs and preferences and capture them into the type of rewards to provide.
The objective of this study is to explore the types of reward programs preferred by different
demographic groups in the Singapore context. Reward programs are classified into the
categories of “immediate rewards” versus “delayed rewards” as well as “monetary rewards”
versus “non-monetary rewards”. A questionnaire was designed as a means to collect the
primary data required. 179 respondents were involved.
The findings of the study revealed that Singapore females are more attracted by reward
programs as compared to Singapore males. In general, males prefer an immediate reward
rather than a delayed one. There is no strong correlation between age group and preference
for point accumulation program. Nor is there any strong correlation between income level
and preference for point accumulation program. Air miles accumulation is the least
preferred form of reward program among cardholders and cardholders in general are more
attracted to monetary rewards than non-monetary ones.
These results will be of interest for card issuers to further customise their reward programs
to suit the needs of their customers.
Credit Card Reward Program in Singapore – The Consumers’ Choice
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ACKNOWLEDGEMENTS
The completion of this thesis will not be possible without the support and contributions
by a large number of individuals.
Firstly, I would like to express my sincere gratitude to my supervisor, Anders
Hederstierna, for his invaluable support and guidance throughout the course of this
thesis. Without his advices and suggestions, the completion of this thesis will not be
possible.
My deepest appreciation goes to my family and friends for their constant
encouragements and assistance in helping to disseminate the questionnaire to a larger
group of respondents.
Also, I am grateful to all the respondents who had taken time off from their busy
schedules to complete the questionnaire.
Lastly, I would like give special thanks to my husband, Kenneth, for his unwavering
support and understanding throughout the course of this thesis.
Ivy Ng June 2009
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TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION ..................................................................... 2
1.1 A BRIEF HISTORY ............................................................................................................... 2
1.2 THE RISE OF REWARD PROGRAM .......................................................................................... 3
1.3 MOTIVATION FOR RESEARCH TOPIC ...................................................................................... 3
1.4 OBJECTIVE OF STUDY ......................................................................................................... 4
1.5 OUTLINE OF ENTIRE THESIS ................................................................................................. 5
CHAPTER TWO: UNDERSTANDING SINGAPORE .............................................. 8
2.1 OVERVIEW OF SINGAPORE BANKING INDUSTRY ....................................................................... 8
2.2 OVERVIEW OF CREDIT CARD MARKET IN SINGAPORE................................................................. 9
2.3 SINGAPOREANS, THE MULTIPLE CARDHOLDERS ...................................................................... 11
2.4 CREDIT CARD REWARD PROGRAMS IN SINGAPORE ................................................................ 11
CHAPTER THREE: LITERATURE REVIEW ......................................................... 14
3.1 INTRODUCTION .............................................................................................................. 14
3.2 REWARD PROGRAM – THE DECIDING FACTOR ....................................................................... 14
3.3 DEFINITION OF REWARD PROGRAM .................................................................................... 16
3.4 OBJECTIVE OF REWARD PROGRAM...................................................................................... 16
3.5 CLASSIFICATION OF REWARDS AND REWARD PROGRAMS ......................................................... 17
3.6 CHOICE OF CREDIT CARD REWARD PROGRAM ........................................................................ 20
3.7 CONCEPTUAL MODEL ....................................................................................................... 21
3.7.1 Modified conceptual model ............................................................................................................ 21
3.7.2 Rationale for choice of conceptual model ....................................................................................... 23
3.7.3 Instant benefits – a type of reward program .................................................................................. 24
CHAPTER FOUR: RESEARCH METHODOLOGY ................................................ 27
4.1 INTRODUCTION .............................................................................................................. 27
4.2 RESEARCH DESIGN .......................................................................................................... 27
4.3 DATA COLLECTION .......................................................................................................... 28
4.4 DATA SOURCE ................................................................................................................ 29
4.5 SURVEY ........................................................................................................................ 30
4.6 QUESTIONNAIRE DESIGN .................................................................................................. 31
4.6.1 Organization of Questionnaire........................................................................................................ 31
4.6.2 Types of Measurement ................................................................................................................... 33
4.6.3 Multiple Indicators .......................................................................................................................... 33
4.6.4 Guidelines on Questionnaire Construction ...................................................................................... 35
4.6.5 Pre-test Conducted ......................................................................................................................... 35
4.7 SAMPLING ..................................................................................................................... 36
4.8 COLLATION OF RESPONSES ............................................................................................... 36
4.9 LIMITATION OF RESEARCH METHODOLOGY ........................................................................... 37
Credit Card Reward Program in Singapore – The Consumers’ Choice
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CHAPTER FIVE: RESEARCH FINDINGS AND ANALYSIS .................................... 39
5.1 INTRODUCTION .............................................................................................................. 39
5.2 DEMOGRAPHIC PROFILES .................................................................................................. 39
5.2.1 Gender ............................................................................................................................................ 39
5.2.2 Age Group ....................................................................................................................................... 40
5.2.3 Annual Income Level ....................................................................................................................... 41
5.3 HYPOTHESIS 1 ................................................................................................................ 42
5.4 HYPOTHESIS 2 ................................................................................................................ 45
5.5 HYPOTHESIS 3 ................................................................................................................ 49
5.6 HYPOTHESIS 4 ................................................................................................................ 51
5.7 HYPOTHESIS 5 ................................................................................................................ 51
5.8 HYPOTHESIS 6 ................................................................................................................ 53
CHAPTER SIX: CONCLUSION ......................................................................... 57
6.1 SUMMARY AND FINDINGS ................................................................................................ 57
6.2 RECOMMENDATIONS ....................................................................................................... 58
6.3 AREAS FOR FURTHER RESEARCH ......................................................................................... 58
REFERENCES ................................................................................................. 61
APPENDICES ................................................................................................. 66
APPENDIX A – QUESTIONNAIRE ............................................................................................ 66
APPENDIX B – RESULTS OBTAINED FROM QUESTIONNAIRE ................................................ 71
APPENDIX C – SPEARMAN CORRELATION COEFFICIENT ....................................................... 85
Credit Card Reward Program in Singapore – The Consumers’ Choice
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LIST OF FIGURES
FIGURE 1-1: OUTLINE OF ENTIRE THESIS .............................................................................................. 6
FIGURE 2-1: NUMBER OF CREDIT AND CHARGE CARDS ISSUED IN SINGAPORE ............................................ 10
FIGURE 4-1: DIFFERENCES BETWEEN QUALITATIVE AND QUANTITATIVE APPROACH ..................................... 28
FIGURE 4-2 ORGANIZATION OF QUESTIONNAIRE ................................................................................. 31
FIGURE 5-1: GENDER DISTRIBUTION OF RESPONDENTS ......................................................................... 39
FIGURE 5-2: AGE GROUP OF RESPONDENTS ....................................................................................... 40
FIGURE 5-3: ANNUAL INCOME LEVEL DISTRIBUTION OF RESPONDENTS .................................................... 41
FIGURE 5-4: ATTRACTIVENESS OF REWARD PROGRAMS AS ONE OF THE REASON FOR CHOICE OF CREDIT CARD .. 42
FIGURE 5-5: AWARENESS OF TYPES OF REWARD PROGRAMS OFFERED BY CREDIT CARDS .............................. 43
FIGURE 5-6: UTILISATION OF REWARD PROGRAMS............................................................................... 43
FIGURE 5-7: TYPE OF REWARD PROGRAMS INFLUENCE CHOICE OF CARD TO USE DURING PURCHASE ............... 44
FIGURE 5-8: ORDER OF PREFERENCES FOR MALE RESPONDENTS ............................................................ 45
FIGURE 5-9: MALES RESPONDENTS WHO PREFER CASH REBATE DUE TO ITS HASSLE FREE NATURE .................. 46
FIGURE 5-10: MALE RESPONDENTS WHO DISLIKE CASH REBATE AS THEY CAN NEVER FIGURE HOW IT WORKS ... 47
FIGURE 5-11: MALE RESPONDENTS WHO SIGN UP FOR A CARD DUE TO ATTRACTIVE RETAIL DISCOUNTS .......... 48
FIGURE 5-12: MALE RESPONDENTS WHO HAVE REDEEMED THE POINTS WITHIN THE LAST 6 MONTHS............. 48
FIGURE 5-13: MALE RESPONDENTS WHO HAVE NOT BEEN REDEEMING DESPITE SUFFICIENT POINTS ............... 49
FIGURE 5-14: RANKING OF AIR MILES ACCUMULATION PROGRAM ........................................................... 52
FIGURE 5-15: RANKING ORDER OF 4 TYPES OF REWARD PROGRAMS ........................................................ 52
FIGURE 5-16: PREFERENCE BETWEEN CASH VOUCHERS AND PRODUCT REDEMPTIONS ................................. 53
FIGURE 5-17: APPEAL BETWEEN MONETARY AND NON-MONETARY REWARDS ........................................... 54
FIGURE 5-18: PREFERENCE OF MONETARY REWARDS TO NON-MONETARY ONES DUE TO ITS FLEXIBILITY ......... 55
Credit Card Reward Program in Singapore – The Consumers’ Choice
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LIST OF TABLES
TABLE 3-1: CLASSIFICATION OF REWARDS AND REWARD PROGRAMS ....................................................... 20
TABLE 3-2 PREFERENCE OF REWARDS BY US CONSUMERS..................................................................... 21
TABLE 3-3: MODIFIED FRAMEWORK FROM DOWLING & UNCLES (1997) AND BENAVENT & MEYER-WAARDEN
(2001). ............................................................................................................................... 22
Credit Card Reward Program in Singapore – The Consumers’ Choice
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CHAPTER ONE: INTRODUCTION
1.1 A brief history
Consumer reward program began as early as 1896 in the United States. A company, founded
by Thomas Sperry and Shelly Hutchinson (S&H), came up with the idea of selling “stamps” to
merchants. (Simon, 2006) Merchants bought these stamps from S&H Company who in turn
gave them to their shoppers. These stamps, also known as “S&H Green Stamps” acted as
rewards for customers. The more the customers purchased, the more stamps they were
awarded. With sufficient accumulation of stamps, customers were allowed to redeem for
merchandise from a catalogue or from the local Green Stamps store. Each item listed in the
catalogue or in the Green Stamps store was assigned a value in terms of the number of
stamps required. This almost resembles today’s point accumulation program, only with the
advancement from the use of stamps to electronic points. S&H Green Stamps continued its
popularity in the next few decades.
By the 1960s, such trading stamps became so popular that major supermarket chains such
as Tesco joined the bandwagon too. (Tesco PLC, 2009)
By the 1980s, airlines started to adopt reward program that awarded customers with air
miles points. American Airlines, the first mover in the airline industry, introduced the
AAdvantage Programme in 1981. (O’Malley, 1998)
A few years later, the credit card industry followed this trend. 1986 marked the birth of the
credit card reward program. (Discover Financial Services, 2009) The “Discover Card”
introduced a cash back reward program. Cash rebates were granted to customers at the end
of each year based on the amount spent using the card.
Reward program has now emerged to be an important marketing tool used by retailers in
different industries.
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1.2 The rise of reward program
Before the introduction of reward program, credit card issuers compete among themselves
on the basis of rates and charges. Annual membership fee and interest charged for late
payments were lowered in order to gain a larger share of the market.
However, as competition increases and the market become more concentrated, card issuers
are looking for new alternatives to attract new customers and entice existing ones to use
their cards. Reward program become the solution. Card issuers started to develop the best
reward program to attract consumers.
Reward program has become so widespread that it is no longer considered a “bonus” to
cardholders. Instead, it has evolved to become a “requirement” in their choice of credit
cards.
As the expectation of reward program rises, card issuers have to take a step further by not
only providing attractive rewards, but, customizing the reward programs to suit the
different needs of their customers. Issuers need to adopt a market-oriented strategy to
understand customers’ needs and preferences and capture them into the type of rewards to
provide.
1.3 Motivation for research topic
Singapore’s banking industry has become a concentrated one since the implementation of
the 5 years liberalisation programme. The three local players, namely Development Bank of
Singapore, Overseas Chinese Banking Corporation and United Overseas Bank; together with
their foreign counterparts (including Citibank, Standard Chartered Bank, Hong Kong
Shanghai Banking Corporation etc) were all vying for a share of the local market.
In order to ensure sustainability and remain competitive in the long run, it is essential for
the players to understand what the customer wants. It is only through value creation and
Credit Card Reward Program in Singapore – The Consumers’ Choice
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satisfaction of their needs that banks can retain customers, attract new ones and build
customer loyalty.
It is usual for a Singaporean to be a multiple card holder. However, they might not be
spending equally on all cards. Most of the Singaporeans will tend to accumulate their
spending on one “preferred” card while the rest of the cards are held for various purposes.
Accumulating spending on a single card not only allows an easy and convenient bill payment
process, it also allows cardholders to be able to maximise their reward points to achieve
higher value redemptions.
Credit cards are a major source of revenue for banks in the consumer credit sector. With
such intense competition, in order for a credit card to be “top of the wallet”, card issuers
have to understand the main deciding factor that influences the consumers’ choice of a
“preferred” card.
Previous researches have been conducted in this area and most of which conclude that the
reward program is an important consideration.
In this research paper, I will go a step further to complement prior research by exploring the
preferences of different demographic groups in the types of reward programs.
This will enable banks to adopt the right marketing strategy to attract customers, entice
them to spend on their cards and consequently, obtain a larger market share and revenue
income.
1.4 Objective of study
The objective of this research paper is to investigate the cardholder’s preference towards
the types of reward programs in the Singapore credit card market.
Specifically, the following hypotheses will be tested and analysed.
Hypothesis 1: Females are more attracted by reward programs as compared to males.
Credit Card Reward Program in Singapore – The Consumers’ Choice
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Hypothesis 2: Males prefer an immediate reward program to a delayed reward program.
Hypothesis 3: There is a strong correlation between preference for point accumulation
program and age group.
Hypothesis 4: There is a strong correlation between preference for point accumulation
program and income level.
Hypothesis 5: Out of the 4 types of reward programs namely cash rebates, instant benefits,
point accumulation and air miles accumulation; air miles accumulation is the least preferred
among cardholders.
Hypothesis 6: Cardholders are more attracted to monetary rewards than non-monetary
rewards regardless of demographic groups.
1.5 Outline of entire thesis
This research paper is organized into six chapters.
The first chapter provides a background of the reward program, which includes a brief
history as well as how reward program rose to its important status today. It also outlines
the main motivation behind this research paper and the objectives it aims to achieve.
The second chapter introduces the readers to an overview of the Singapore banking
industry and in particular, the credit card market. It also provides an understanding of the
multiple cardholder behaviour in Singapore. The various types of credit card reward
programs available in Singapore will be discussed as well.
The third chapter examines the various previous researches that had been performed in this
area. A conceptual framework will be developed for the current research with insights from
the literature review. Rationale for the choice of conceptual framework will be explained
here.
Credit Card Reward Program in Singapore – The Consumers’ Choice
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The fourth chapter elaborates on the type of research design adopted as well as the
research methods used. Data collection consisting of both primary and secondary data will
be explained. The type of sampling method and questionnaire design will also be discussed
here. A limitation of the research methodology adopted will be analysed.
Chapter five brings us to evaluate and analyse the research findings obtained.
Chapter six concludes the report with major findings. Recommendations from the current
research, as well as areas for further research will be highlighted here.
Figure 1-1 below illustrates the flow of the thesis.
Figure 1-1: Outline of entire thesis
1 • INTRODUCTION
2 • UNDERSTANDING SINGAPORE
3 • LITERATURE REVIEW
4 • RESEARCH METHODOLOGY
5 • RESEARCH FINDINGS AND ANALYSIS
6 • CONCLUSION
Credit Card Reward Program in Singapore – The Consumers’ Choice
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CHAPTER TWO
UNDERSTANDING
SINGAPORE
Credit Card Reward Program in Singapore – The Consumers’ Choice
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CHAPTER TWO: UNDERSTANDING SINGAPORE
2.1 Overview of Singapore banking industry
Singapore, the smallest nation in South-East Asia, has a land area of 710.2km2. (Singapore
Department of Statistics, 2008) Despite being small, it is renowned as a leading Asia
Financial Hub since the last decade with its politically stable environment, strong economic
fundamentals, a well developed physical and financial infrastructure as well as a strategic
geographical and time zone location. (Hew, 2002)
Since the Asia Economic Crisis that took place in 1997, the Singapore government saw a
need for further consolidation of the local banks in order to stay competitive. From a speech
by Mr Lim Hng Kiang, Deputy Chairman of Monetary Authority of Singapore (MAS), the crisis
is a clear signal that the financial services sector is a global industry. (MAS, 2002) Small
banks are no longer able to compete with the larger international banks. As Singapore’s
Prime Minister Mr Lee Hisen Loong puts it in a ministerial statement on July 2001, “the
industry is characterized by large economies of scale”. Only large banks will have sufficient
resources to compete in this globalised environment.
In May 1999, MAS announced a five year programme to liberalise access by foreign banks
into the domestic banking industry. (MAS Annual Report 2000/2001) The main objective is
to enhance the competitiveness of the banking industry, and to encourage domestic banks
to develop and strengthen their capabilities in the face of fiercer and more aggressive
competition from the bigger foreign players.
The first phase commenced in 1999, over a period of 3 years. It involved granting new
banking privileges and new licences for foreign banks.
A new category of licence known as the “Qualifying Full Bank” was introduced, number of
“Restricted Bank” licences was increased and “Qualifying Offshore Bank” privileges were
granted to approved offshore banks. (MAS, 2001)
Credit Card Reward Program in Singapore – The Consumers’ Choice
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The first phase of the five year programme was phased in progressively, allowing time for
the local banks to upgrade themselves and at the same time ensure financial stability of the
Singapore financial system. (MAS, 2001)
The industry adjusted well to the new environment and a series of consolidation took place
from 1998 to 2001. The seven local banking groups consolidated to become today’s three
local players, namely Development Bank of Singapore, Overseas Chinese Banking
Corporation and United Overseas Bank. (MAS, 2004a)
Phase two started in June 2001, which included expanding existing privileges of Qualifying
Full Banks. More Qualifying Full Banks status was granted too. The Restricted Bank licence
ceased and was replaced by the “Wholesale Bank” licence to reflect the more privileges and
wider range of banking activities that it could undertake. All Qualifying Offshore Banks and
Offshore Banks were being upgraded to Wholesale Bank over time. (MAS, 2001)
The liberalization further enhanced Singapore’s role as an international financial centre.
2.2 Overview of credit card market in Singapore
MAS act as the central bank of Singapore. It is responsible for the financial supervision as
well as the financial development of Singapore which includes the conduct of monetary
policy, the issuance of currency as well as establishment of various statutes such as the
Banking Act to govern the banking industry. (MAS Annual Report 2007/2008)
According to MAS Credit and Charge Card Statistic (MAS, 2009), over the past 8 years, the
total number of cards issued in Singapore, which includes both the main cards as well as the
supplementary cards, has been increasing. As of 2001, the total number of cards issued was
2,813,989. By the end of 2008, this figure has risen to 6,277,915. (MAS, 2009) The number
of cards issued has increased by more than 120% within the last 8 years!
Credit Card Reward Program in Singapore – The Consumers’ Choice
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Figure 2-1: Number of credit and charge cards issued in Singapore
The increase in numbers could be partly due to the liberalisation of the banking industry in
Singapore, which allows and hence attracts more foreign banks to fight for a share in the
local market.
There has been a trend towards a cashless society worldwide as we moved into the 21st
century. Singapore is no exception. This has been made possible with the rapid
advancement of technology. We are now able to transfer funds in the comfort of our home
without having to wait in the queue of a banking hall; we are able to make purchases online
with the use of electronic money or the credit card.
The move towards a cashless society has greatly increased the usage of credit and charge
cards. One of the most apparent reasons is the greater level of convenience it helps to
achieve. With a card in our wallet, purchases can be made with minimum hassle. There is no
longer a need to carry notes and cumbersome loose change in our pockets.
This increase in demand by consumers constitutes another reason for the increase in
number of cards issued over the years.
0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
2001 2002 2003 2004 2005 2006 2007 2008
Number of Credit and Charge Cards issued in Singapore
No. of Cards
Credit Card Reward Program in Singapore – The Consumers’ Choice
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2.3 Singaporeans, the multiple cardholders
According to the Singapore Department of Statistics (2009), Singapore has a population of
4.84 million as of June 2008. Singapore residents, comprising of both Singapore citizens and
permanent residents, make up 3.64 million of the total population. Out of the 3.64 million
of Singapore residents, 2.71 millions are within the age group of 20 and above.
It was mentioned in Section 2.2 that the total number of credit and charge card issued as at
the end of 2008 was approximately 6.3 million. Comparing this statistic with Singapore
residents aged 20 and above, it can be estimated that an average cardholder in Singapore
holds more than one credit card. This is further supported by a previous research performed
by Gan et al. (2008). According to their sample size of 636 cardholders in Singapore, the
mean number of credit cards held by each cardholder is 2.27.
Major card issuers in Singapore include the three local banks; Development Bank of
Singapore, United Overseas Bank, Overseas Chinese Banking Corporation and international
players such as Citibank, Standard Chartered Bank, Hong Kong Shanghai Banking
Corporation, as well as Maybank, Bank of China and The Royal Bank of Scotland.
Each of these banks offers more than one credit card to suit the different needs and
preferences of its customers. With the wide variety of cards to choose from, it is of no
surprise that an average Singaporean has more than one plastic in their wallet.
However, the intent to hold the cards differs. Some people increase their arsenal of plastic
in order to take full advantage of any retail privileges that he or she may chance upon.
Others may hold it to increase their unsecured credit limit. Whatever the reason, card
issuers are constantly faced with a never-ending challenge to make their card the top choice
in consumers’ limited wallet space.
2.4 Credit Card Reward Programs in Singapore
The more common credit card reward programs offered by the various card issuers in
Singapore consist of the following:
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(i) Point Accumulation Program - Points will be awarded for every purchase made
using the credit card. Sufficient points accumulated after repeated purchases will
entitle the card holder to voucher or product redemption from the card issuers’
catalogue. Redemption can be made conveniently either through the phone or
internet. Usually, there is an expiry date for the points accumulated; it could be
annually or bi-annually from the date the points were issued, depending on the
terms and conditions of the card.
(ii) Air Miles Accumulation Program - Air miles can be earned for every purchase
made using the credit card. Sufficient air miles obtained will entitle the card
holder to a free air ticket, discounted upgrades, access to first class lounges at
airports or other privileged services and upgrades. There are usually route and
date restrictions attached to the redemption of air miles.
(iii) Cash Rebates - Rebates are credited back into the credit card for purchases made.
Depending on the card issuers’ terms and conditions, they can be either used to
offset credit card bills or sent to cardholders in the form of a cheque at the end
of every quarter or year. In certain circumstances, such rebates will be “kept” in
the card electronically and can only be used to offset the next purchase made in
participating outlets.
(iv) Instant Benefits - These represent instant rewards such as promotions and
discounts. Cardholders will be entitled to discounts at point of purchase. Some
examples of instant benefits include X% off total bill, a buy 3 get 1 free offer etc.
(v) Other intangible privileges – These includes priority queues, preferred seating,
access to exclusive events and members-only sales.
Most of the card issuers in Singapore provide reward programs for their valued customers
free of charge. Customers usually do not have to pay any fee to join a reward program. This
partly explains the immense popularity and importance of reward program in the choice of
a credit card in Singapore.
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CHAPTER THREE: LITERATURE REVIEW
3.1 Introduction
There have been various studies conducted in the area of credit cards selection criteria in
Singapore and worldwide. The topic on reward program, as a loyalty marketing tool, has
also been widely discussed in different industry contexts. However, little has been published
specifically in the area of credit card reward program. This research aims to close this gap by
analysing the types of reward programs preferred by the different demographic groups in
Singapore.
In this chapter, I will begin with a review of the importance of reward program in the choice
of a credit card. This will be followed by how different researchers define reward program
and its main objectives. The different classification of reward programs will be examined
and evaluated. A conceptual model will be developed based on insights obtained from the
literature review. Lastly, rationale for the choice of a conceptual model will be explained.
3.2 Reward program – The deciding factor
The importance of reward program cannot be undermined. With a superior reward program,
card issuers are more able to position itself as “top of the wallet”. Reward program is one of
the factors influencing the choice of a credit card; it is also a deciding factor among multiple
cardholders in the choice of their “preferred” card. This is supported by various studies.
Gan et al. (2008) cited a report by Visa International (2004) that the main reason for a
Singaporean to hold multiple credit cards is to benefit from the different discounts,
promotions and privileges offered by the different cards. It was also mentioned by the
authors that studies (Carow & Staten, 1999; Schlossberg 1998; Stavins, 1996) from United
States found that rebates and rewards were the major reasons for consumers to use their
credit cards.
Credit Card Reward Program in Singapore – The Consumers’ Choice
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Devlin et al.(2007) examined the reasons why multiple cardholders have a “main” card that
is frequently used, and “subsidiary” cards to which they use less often or perhaps only
during emergency. The most frequently stated reason from the research among Singapore
cardholders was “to take advantage of the various discounts and promotions the card issuer
had made available, which are considered to be more superior to those offered by other
issuers.” The second most frequently listed reason was “a better reward program offered by
the card issuer.”
In a study conducted by Gan and Maysami (2006), “promotional factor” is considered the
fourth most important criteria in the choice of a credit card in Singapore. Within the
variables under the promotional factor, “loyalty and reward programs” ranked the highest,
and this was followed by “special discounts in selected outlets”.
Wee (2006) cited that according to the telecast of the Big Picture by Channel New Asia, the
services provided by the card issuers as well as the attractiveness of the reward program are
the key factors that entice consumers to sign up for a credit card and utilise it. In addition,
research performed by Wee (2006) revealed that discounts tied up with retail merchants
and attractive reward programs are reasons frequently cited by Singapore women that
attracted them to sign up for a Lady’s or Women’s card, enticed them to spend on it and
retained the card.
A consumer loyalty survey was conducted by First Data Competitive Intelligence with over
1,000 US consumers in July 2008. It was found that a majority of these consumers were
members of credit card reward program. And most of them indicated that reward program
membership influenced their choice of card to use.
According to a consumer credit card program study conduct by TNS Global (a market
research firm) between August to November 2008, reward program was a significant
consideration in many of the US customers’ decisions involving credit cards. These included
their acquisition and usage considerations. A reward card is often the “primary” card and
the card that constitute the “top of the wallet” status.
Credit Card Reward Program in Singapore – The Consumers’ Choice
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Similar surveys were conducted in Singapore in 2007 by Gow et al. (2008) published in The
Business Times, a Singapore Local Newspaper. Discounts and promotions were deemed to
be the second most important factor in the choice of a credit card.
3.3 Definition of reward program
Reward Program is also commonly known as Loyalty Program or Frequency Program.
Various definitions have been provided by researchers. According to Sharp and Sharp (1997),
“loyalty programs are structured marketing efforts that reward, and therefore, encourage,
loyal buying behaviour”.
It is a promotional tactic used by firms to enhance customer loyalty through the provision of
incentives to customers who made repeated purchases. (Kim et. al, 2001)
Johnson (1998) had similar views. He defined a loyalty program as “any marketing program
that is designed to increase the lifetime value of current customers through a long-term
interactive relationship.”
Kivetz and Simonson (2002) described a frequency program as a “form of marketing tool to
retain customers and increasing their level of usage of product and services.”
3.4 Objective of reward program
Reward programs are introduced for various objectives.
According to Dowling and Uncles (1997), there are three main objectives of a reward
program.
Firstly, it can be seen as a defensive marketing strategy to sustain current sales level and
prevent customer from switching to competitors that might led to erosion of market share.
Reward program can be used to increase the switching cost of customers since points and
Credit Card Reward Program in Singapore – The Consumers’ Choice
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rewards accumulated will be forgone when a customer choose to switch to a competitor. In
short, a reward program seeks to “lock in” existing customers.
Secondly, it can also be seen as an offensive marketing strategy to increase the share of the
pie in the market. By developing customer loyalty, firms that adopt reward programs are
able to increase their profitability via increased and repeated purchases made by existing
customers.
Lastly, it can also be seen as a tactic that leads to cross selling to existing customers.
O’Malley (1998) also established several objectives of a reward program.
According to O’Malley, reward program is often used as a tool to generate information
regarding customers’ buying behaviour, preferences and lifestyles. Such information is
useful in helping retailers to segment their target markets and customise offers to better
serve their valued customers.
Although the main stated reason for reward program is to reward loyal customers, the
underlying motive could be to manipulate the buying behaviour of customers. Discounts
and promotions (such as buy 3 get 1 free while stock last or a 20% discount off total bill for a
specified period) can be seen as a tacit to increase the current purchases made by
customers. Lastly, O’Malley also stated that reward program is used as a defensive strategy
to combat competitors move.
3.5 Classification of rewards and reward programs
Gillies et al. (2005) cited Smith (2000) who distinguishes six different types of loyalty
program.
(i) Service Program – One that provides VIP services to its value customers. Such as
offering priority queues and access to first class lounges at airports.
(ii) Information and Advice Program – One that uses information and advice to
enhance a product experience.
Credit Card Reward Program in Singapore – The Consumers’ Choice
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(iii) Discount Program – One that offers members-only discounts.
(iv) Community Program – One that gets customers to interact among themselves.
(v) Access Program – One that provides customers with access to exclusive events.
(vi) Points Program – One that grants points to customer upon purchases made
which can be accumulated for future redemption.
Dowling and Uncles (1997) advocate that the attractiveness of a reward program not only
depends on the value of the rewards, it also depends on the timing of the reward. Rewards
can either be immediate or delayed. An immediate reward occurs at the point of purchase,
whereas a delayed one occurs after reaching a certain number of purchases or accumulation
of points. According to the authors, an immediate reward is often preferred.
This is further supported by Jang and Mattila (2005) who cited previous work by Bootzin et
al. (1991) who suggested that delayed redemption reduces the motivational power of
loyalty rewards.
Dowling and Uncles (1997) also classify rewards according to whether they directly support
the product’s value proposition. The authors consider rewards that directly support the
product’s value proposition to be more able to develop customer loyalty towards the
product or brand and not simply towards the reward program.
Kivetz and Simonson (2002) conducted a research to find out the effect of program
requirement on customer preference between necessity and luxury rewards. It was found
that customers preferred luxury rewards to a necessity one the higher the program
requirement.
Benavent and Meyer-Waarden (2001) differentiate rewards on the basis of whether they
are soft or hard benefits. Hard benefits refer to purely financial and tangible rewards. Soft
benefits are intangible rewards such as private sales, priority queue and other privileged
services. The authors define hard benefits as monetary rewards while soft benefits were
referred to as non-monetary ones.
Jang and Mattila (2005) had similar classification. They conducted two focus group
interviews with graduate students in hospitality management as well as constructed a
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questionnaire with 145 respondents to test the preference between monetary and non-
monetary rewards in the restaurant industry context. It was revealed that monetary reward
is the preferred choice due to its convenience and flexibility. The authors also tested the
respondents’ preference between immediate and delayed rewards as well as between
necessity and luxury rewards. Results from the study indicated that consumers preferred
immediate rewards to delayed ones. Also, a vast majority of the respondents preferred
necessary rewards to luxury rewards. It was noted that their preference for luxury rewards
increased with a higher level of effort requirement.
Kim et al. (2001) refer to two different types of rewards, efficient and inefficient rewards. A
reward is considered inefficient if it results in higher unit reward cost for the offering firm.
An example will be a cash reward. On the other hand, a free product of the firm, such as an
air ticket for an airline company will be considered an efficient reward.
Table 3-1 summarises the key classifications of rewards and reward programs provided by
the various researchers.
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CLASSIFICATION OF REWARDS AND REWARD PROGRAMS
Smith (2000) Service Program
Information & Advice Program
Discount Program
Community Program
Access Program
Points Program
Dowling and Uncles
(1997)
Timing of Reward : Immediate Vs Delayed
Direct Vs Indirect support of product value proposition
Kivetz and Simonson
(2002)
Necessity Vs Luxury Rewards
Benavent and
Meyer-Waarden
(2001)
Hard Benefits (Monetary) Vs Soft Benefits (Non-monetary)
Immediate Vs Differed (Delayed) Rewards
Kim et al. (2001) Efficient Vs Inefficient Rewards
Table 3-1: Classification of rewards and reward programs
3.6 Choice of credit card reward program
A survey was conducted by First Data Competitive Intelligence in July 2008 among 200 US
consumers on credit card reward program. (Brant, 2008) Cash back reward program
appeared to be the most preferred reward among the 200 US consumers. This was followed
by point and miles accumulation reward program. Instant benefits such as discounts and
promotions upon point of sales are the least preferred among the four. The table below
illustrates the ranking of different types of rewards by US consumers from the most
preferred to the least preferred.
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Ranking Order Type of Reward
1 Cash Back
2 Points or Miles Redeemable for Merchandise or Upgrades
3 Prepaid/Gift Cards
4 Free Merchandise / Upgrades
5 Money added to a Prepaid/Gift Card
6 Discounted Prices for Merchandise or Upgrades
7 Discounts or Rebates on Gas
8 Discounts at Point of Sale
9 Special Member-Only Benefits
10 Coupons for Discounts on Specific Items
11 Coupons for Discounts on Total Purchase
Table 3-2 Preference of Rewards by US consumers
TNS conducted a similar survey. Data was collected through a 24 pages long questionnaire
that was mailed to respondents between August to November 2008. A total of 11,400
surveys were mailed. A total of 3,901 households responded, thereby yielding a response
rate of 34%. Similar results were obtained as in First Data Competitive Intelligence. Cash
back reward program emerge to be the most preferred reward among US consumers. It
appears to be the most popular reward across all age and affluence groups; with the
exception of the younger upper mass segment. (TNS Global, 2009) A point accumulation
program turns out to be more attractive to this segment.
3.7 Conceptual model
3.7.1 Modified conceptual model
Different classifications of rewards were provided by previous researchers as discussed
above. For this research paper, I will be modifying Dowling and Uncles (1997) as well as
Benavent and Meyer-Waarden (2001) conceptual model of reward program classification.
Table 3-3 illustrates the modified framework that will be applied.
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Type of Rewards Immediate Reward Delayed Reward
Monetary Reward Instant Benefits : Discounts and
Promotions
Cash Rebates
Point Accumulation : Redemption
of Cash Vouchers
Non-monetary
Reward
Priority Queues, Privileged Services,
Exclusive member-only sales
events, preferred Seating.
Point Accumulation : Redemption
of Products / Merchandise
Air Miles Accumulation: Access to
First Class Lounges at airports, free
upgrades.
Table 3-3: Modified framework from Dowling & Uncles (1997) and Benavent & Meyer-
Waarden (2001).
The various credit card reward programs offered by card issuers in Singapore have been
further broken down into the classification of “Immediate Vs Delayed Rewards” and
“Monetary Vs Non-Monetary Rewards” in Table 3-3 above.
For this research paper, monetary rewards will be defined as rewards that can be expressed
in financial value reliably and accurately with certain degree of flexibility in usage. These
include cash rebates, discounts, product cash vouchers and lucky draws with monetary
prizes.
Non-monetary rewards will be defined as rewards that cannot be expressed in financial
value reliably and accurately. These include priority queue, preferred seating, privileged
services such as access to first class lounges at airports, product redemptions, and lucky
draws with merchandise such as car, an air ticket or a hotel stay as a prize.
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3.7.2 Rationale for choice of conceptual model
The main motivation behind this research paper is to help card issuers find out more about
the preference of reward programs among cardholders, hence, a customer-oriented
approach to classify reward programs will be employed. The classification adopted by Kim et
al. (2001), “efficient and inefficient rewards” as well as the “direct and indirect support of
product’s value proposition” by Dowling and Uncles (1997) are not adopted in this research
paper. These two classifications had a focus that is inclined towards the retailer’s
perspective instead of a customer’s perspective. The efficiency of a reward depends on the
reward costs incurred by the firm. The higher the reward cost incurred, the more inefficient
the reward, ceteris paribus. This is mainly a retailer’s concern, or in this specific case, the
card issuer’s concern. Whether a reward is efficient or not does not matter to the customer.
The same goes for Dowling and Uncles’ classification as direct or indirect support of
product’s value proposition. With a reward that supports the product’s value proposition,
retailers are more able to develop loyalty among customers towards the product instead of
towards the reward program. However, to a customer, as long as he or she is able to gain
some benefit from the reward, it does not matter whether it is in support of the product’s
value proposition.
Kivetz and Simonson (2002) classify rewards as either a “necessity” reward or a “luxurious”
one. The authors defined luxury item as “a non-essential item or service that leads to
luxurious living”. Necessity items were referred to as those “that cannot be done without”.
However, different people have different definition of what constitute a necessity and what
constitute a luxurious item depending on their standard of living and their income level.
Therefore, this classification will not be incorporated in the current research as well.
Lastly, some of Smith (2000) classifications of reward programs are not applicable in the
credit card context. They include the Community Program and Information and advice
Program. Consequently his framework will not been applied.
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3.7.3 Instant benefits – a type of reward program
Some researchers such as Dowling and Uncles (1997) consider “discounts and promotions”
as a type of reward program. However, there are others such as Yi and Jeon (2003) who
think otherwise. They do not regard instant discounts and promotions to be part of a
reward program as they deemed a reward program to be of a “long term perspective”. To
them, discounts and promotions only stimulate short term profitability and hence, should
not be included as a reward program.
The determination of whether instant benefits should be considered a form of reward
program depends largely on the particular context it is applied to. In this research paper,
with the emphasis on credit card industry, instant benefits will be considered as part of a
reward program.
A credit card industry is characterised by undifferentiated offerings and low switching cost.
At the point of purchase, customers can easily and conveniently switch from the use of one
card to another from the arsenal of plastics they have in their wallet. This is particularly so
for Singapore cardholders with their multiple card holding behaviour. Card issuers are often
faced with the challenge of ensuring continual usage from customers.
Furthermore, with the proliferation of reward programs in the credit card market, whether
such programs are able to create “loyalty” among customers remains a question. Customers
using a particular card may not do so out of pure genuine loyalty to the card or the card
issuer. They may just be rationalizing their buying behaviour to reap the most benefit from
the reward program. (Wright & Sparks, 1999) In such a case, repeated purchase using a
particular card may not signify loyalty.
Rather than encouraging “loyal buying behaviour”, a better way of interpreting a credit card
reward program is to encourage “repeated purchase” using the issuers’ card. As defined by
Kivetz and Simonson (2002), the aim of a loyalty reward program is to provide customers
with an incentive to stay with the company and prevent them from switching to other
competitors. Instant benefits such as discounts and promotions provided by credit card
issuers are able to achieve this goal.
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Credit card issuers usually have tie-ups with major retailers such as petrol stations,
restaurants or fashion boutiques offering card users with discounts and promotions. Take
the example of Citibank Singapore. Citibank has a tie-up with Esso Mobil which offers up to
a total of 18.4% discount on petrol for drivers using Citibank’s Dividend card as a form of
payment. (Citibank Singapore, 2009) Such discount and promotions tie-up often increase
the usage level of the issuers’ card. Generally, customers rationalise their purchasing
behaviour to “get something out of nothing”. (Wright & Sparks, 1999) Through provision of
such instant benefits, card issuers are able to encourage repeated purchases. Furthermore,
cardholders who are loyal customers of Esso Mobil will be enticed to sign up for a Citibank
Dividend Card. Such retail loyalty will allow card issuers to lock in customers to utilise their
card.
Since such discounts and promotions are able fulfil the objective of a reward program,
consequently, they should be included as part of the program.
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CHAPTER FOUR
RESEARCH
METHODOLOGY
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CHAPTER FOUR: RESEARCH METHODOLOGY
4.1 Introduction
There are many different types of research methods. However, it is important to choose the
most appropriate one that suits the objective of the research. This chapter will address the
type of research methods undertaken and justification of why they are chosen.
4.2 Research design
To quote Ghauri and Grönhaug (2005 p.56), “research design is the overall plan for relating
the conceptual research problem to relevant and practicable empirical research.” There are
basically 3 main classes of research designs: exploratory, descriptive and causal.
The main aim of the exploratory research is to get a better understanding of the research
problem. It is often used when the research problem is unstructured and not clearly defined.
This method offers the most flexibility and is targeted towards researchers who do not have
a clearly formulated research problem and would like to get more information to help them
determine the direction of the research.
In the case of a descriptive design, the research problem is often structured and known
before any research is undertaken. The researcher has a clear understanding of what he or
she wants to measure.
Lastly, a causal design is employed when the researcher intends to search for any cause-
and-effect relationships that exist between 2 or more variables.
For this research paper, a descriptive research design will be undertaken. From the
literature review conducted in the previous chapter, it is understood that the reward
program plays an important role in determining the choice of a “preferred” credit card in
Singapore. As such, a clear research objective was formulated with the aim of determining
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the reward programs preferences of the different demographic groups. The most
appropriate design is hence the descriptive one.
4.3 Data collection
“The choice of a data collection method will depend on an overall judgement of which type
of data is needed for a particular research problem.” (Ghauri & Grönhaug, 2005 p.108)
There are 2 main types of data collection method, namely the quantitative and the
qualitative methods. Figure 4-1 below summarises the main difference between them.
Source: Based on Reichardt and Cook (1979) and Urban Wallace Associate (2005).
Figure 4-1: Differences between qualitative and quantitative approach
Quantitative research involves examining a specific problem, based on testing a theory,
measured with numbers, and analysed using statistical techniques. (Creswell, 1994 p.2) The
objective of using quantitative method of research is to verify whether stated hypotheses
hold true. (Creswell, 1994 p.2) Qualitative research, on the other hand, aims to provide an
understanding of human behaviour. It is more “subjective” as compared to a quantitative
research and provides a more “holistic view” of the subject matter. (Reichardt & Cook, 1979)
A qualitative method is often used when there is little knowledge about the problem of
interest.
Qu
alit
ativ
e
Subjective
Holistic View
Explorative Oriented
Focus on understanding
Reasons and Rationale approach
Deals with "Why" questions
Qu
anti
tati
veObjective
Particularistic View
Hypothetical-deductive
Focus on testing and verification
Facts and logical approach
Deals with "how many" questions
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A quantitative approach will be used in this research paper due to the nature of the
research objective. As the purpose of this research is to “measure” the attitude and
behaviour of card holders according to their demographic groups, a quantitative approach is
more appropriate. A qualitative approach will be aimed at finding out the “reasons” or
“rationale” behind cardholders’ attitude and behaviour. In short, while the quantitative
method aims at measuring “how many”, the qualitative method aims at finding out “why”.
(Urban Wallace Associates, 2005) Six hypotheses with regards to consumer preferences of
credit card reward programs will be tested. Primary data collected will be analysed
statistically and concluded.
4.4 Data source
There are two sources of data, namely primary source and secondary source.
Secondary data source refers to data collected by people other than the researcher. Most
research studies will start off with secondary data analysis whereby a literature review on
previous related research areas will be conducted. For this research paper, a literature
review was conducted to gain further insight into the research problem and to formulate
the direction of the research paper. Secondary data is collected from various sources
including (1) Journal Articles (International Journal of Bank Marketing, International Journal
of Contemporary Hospitality Management, Journal of Services Marketing etc) (2) Internet
websites of different organizations, statutory boards and banks (Monetary Authority of
Singapore, Singapore Department of Statistics Website etc) (3) Studies and reports of
institutions (4) Textbooks (5) News articles (The Business Times) (6) Thesis and Dissertations
written by students from Blekinge Institute of Technology (BTH) and other Universities.
Secondary data may be collected for a different purpose from the current research. As such,
relevance and usability may be limited. This is one of the reasons why primary data need to
be sourced to gather information that cannot be obtained directly via secondary data or
where secondary data requires further support. There are various ways to collect primary
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data. Some of which includes experiments, observations, surveys and interviews such as a
focus group.
For this research paper, a survey will be conducted to collect the required primary data.
4.5 Survey
Surveys refer to a method of data collection that utilizes questionnaires or interview
techniques for recording the verbal behaviour of respondents. (Ghauri & Grönhaug, 2005
p.124) In this research paper, I have designed a 5 pages long, self-administered
questionnaire as a means to collect the relevant primary data required.
A self-administered questionnaire is used because of several reasons: -
Firstly, self-administered questionnaire allows a large number of respondents to be reached
quickly and easily. In order to reach a diversified group of respondents, questionnaires will
be administered via different modes. To begin with, it will be sent out via emails to my
contacts, including friends, colleagues and relatives. Social online networks such as
facebook will also be employed to reach a greater network of potential respondents. A link
is created to which respondents can visit to download a copy of the questionnaire.
Questionnaires will also be printed out and distributed to friends and colleagues for their
further distributions to their contacts. These different ways help to gather responses from
people of different background, age group and professions.
Secondly, a self-administered questionnaire comprises of standardized questions. It is
relatively free from several types of errors including interviewer bias. The tone of the
interviewer in a researcher-administered survey and the different ways of phrasing the
same question by interviewers may give rise to inaccurate responses. Furthermore,
respondents’ desire to impress the interviewers with his or her answers as well as the
unwillingness of respondents to disclose sensitive information to a stranger may hinder the
data collection process. In a self-administered questionnaire, due to the lack of face-to-face
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interactions with the interviewer, respondents are more comfortable to disclose sensitive
data.
Thirdly, responses to a questionnaire can be analysed statistically. As mentioned earlier in
Section 4.3, quantitative data collection will be used for this research paper due to the
nature of the research objective. Questionnaire will therefore be a more appropriate form
as compared to interviews such as a focus group, which is more suited for a qualitative
approach.
4.6 Questionnaire design
4.6.1 Organization of Questionnaire
The questionnaire was organized into 5 different sections as shown in Figure 4-2 below.
Figure 4-2 Organization of Questionnaire
The first section is aimed at understanding the demographics of the respondents. This
includes their gender, the age group they fall under and the annual income level they
earned.
Section 1:
Demographic Profile
Section 2: Perceptions of Reward Programs
Section 3: Types of reward
programs
Section 4: Monetary /
Non-monetary rewards
Section 5: Order of
Preference
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The second section seeks to find out the perception of reward program among respondents.
The main objective is to provide primary data for the first hypothesis of this research.
Hypothesis 1: Females are more attracted by reward programs as compared to males.
The third section seeks to test and build up respondents’ knowledge and understanding of
the 4 different types of reward programs. This section is divided into four sub-sections
representing each of the 4 types of programs. A brief definition of each type of program is
provided. Statements were posed whereby respondents have to state the extent to which
they agree with them. A good understanding of each of the 4 types of reward programs will
ensure a higher degree of accuracy in answering the last section of the questionnaire which
requires respondents to rank the reward programs in order of their preferences.
This section also serves to provide supporting indicators for the testing of hypothesis 2 and
5 as stated below.
Hypothesis 2: Males prefer an immediate reward program to a delayed reward program.
Hypothesis 5: Out of the 5 types of reward programs, air miles accumulation is the least
preferred among cardholders.
The fourth section aims to determine preferences of monetary or non-monetary rewards
among respondents. The purpose is to support the evaluation of the 6th hypothesis.
Hypothesis 6: Cardholders are more attracted to monetary rewards than non-monetary
rewards regardless of demographic groups.
The last section intents to reveal the order of preference among the 4 different types of
reward programs. The 2nd, 3rd, 4th and 5th hypothesis will be answered with these data
collected.
Hypothesis 2 and 5 has been stated above. Hypothesis 3 and 4 is as follows.
Hypothesis 3: There is a strong correlation between preference for point accumulation
program and age group.
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Hypothesis 4: There is a strong correlation between preference for point accumulation
program and income level.
4.6.2 Types of Measurement
A variety of question and response format were adopted for this questionnaire.
Closed ended questions are used throughout the questionnaire. Closed ended questions
require the respondent to pick answers from given options as opposed to an open ended
one whereby respondent has to formulate his own answers. The types of closed ended
questions used include:
(i) Nominal level of measurement. Most questions in Section 1 and 2 of the
questionnaire adopt a nominal level of measurement. Respondents are required
to choose from options that are mutually exclusive.
(ii) Ordinal level of measurement. The remaining sections of the questionnaire
employ an ordinal level of measurement which consists of a Likert Scale and a
Ranking Order.
(a) For a Likert Scale, respondents have to choose a response from the scale
ranging from (1) strongly disagree to (7) strongly agree that best describe
their attitude and behaviour.
(b) For a Ranking Order, respondents have to rank the options provided
according to their order of preference.
4.6.3 Multiple Indicators
Multiple indicators are often used to measure a construct. Through the use of multiple
indicators, researchers are more able to “cover the domain of the construct which it
purports to measure”. (Ghauri & Grönhaug, 2005 p.82)
Multiple indicators have been used in this research paper. And these are reflected in the
various questions asked in each of the section of the questionnaire. Take the example of the
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34
first hypothesis. The first hypothesis aims to find out if females are more attracted by
reward programs than males. Four indicators were used to measure this construct.
(i) Whether the attractiveness of the reward programs is one of the reason for the
choice of credit card
(ii) Whether respondents are aware of the types of reward programs offered by the
cards
(iii) Whether respondents have been utilising the reward programs for their cards
(iv) Whether the type of reward programs influence their choice of card to use
during a purchase.
Respondents who take the attractiveness of reward programs into consideration during the
acquisition stage and usage stage are considered to be attracted by reward programs. Those
who are aware of the types of reward programs offered by the cards and those who have
been utilising them are considered to be attracted by the rewards too.
Similarly, a series of statements were posed to respondents for each type of reward
program in Section III. This serves not only to enhance understanding and knowledge of the
respondents; it also served as a form of multiple indicators. Taking point accumulation
program as an example, six statements were posed to which respondents have to assess
their intensity of agreement. Respondents who are constantly keeping track of the amount
of points they have accumulated, who knows the procedures for redemption of points well,
who have redeemed points within the last 6 months are deemed to rank point accumulation
program as a well-liked program. Those who feel that the redemption process is too
complex and who do not spend enough to accumulate sufficient points as well as those who
have not been redeeming despite accumulating sufficient points are deemed to rank this
program lowly.
The use of multiple indicators reduces the random error that may occur in any research.
Respondents may make mistakes when responding to a questionnaire. With multiple
indicators employed to measure each construct, error on one indicator can be offset by the
other indicators. If the researcher only had one indicator, an inappropriately answered
question by respondents may deem the results to be inaccurate. (Bryman, 1989)
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4.6.4 Guidelines on Questionnaire Construction
Ghauri and Grönhaug (2005 p.129) listed some guidelines when constructing a
questionnaire and they have been taken into consideration during the design stage of this
questionnaire.
(1) As this questionnaire is aimed at targeting Singapore residents of different age group
and income level, questions were asked in a simple, concise and unambiguous
manner that considers the different respondents’ background. Clear instructions
were given for each section of the questionnaire.
(2) In order to ensure all respondents understand the terminology used throughout the
questionnaire (E.g. cash rebates, point accumulation, monetary rewards, instant
benefits etc), a brief description of each has been provided in each section and sub-
sections.
(3) Each question in the questionnaire deals with only 1 aspect of the question.
“Double- barrelled” questions were not included. This avoids confusion in answering
the questions.
(4) Different types of questions formats were adopted to make the questionnaire more
attractive and stimulate interest in the respondents.
4.6.5 Pre-test Conducted
After the questionnaire was drafted, it was sent to 6 individuals for a pre-test. These 6
individuals formed part of the target population and they were requested to complete the
questionnaire. Upon completion, a short discussion was held. Feedbacks were provided by
the 6 individuals with regards to the clarity of the questions and whether each of them
interpreted the question in the same manner. This will help to provide more validity and
reliability in the data gathered later on. Amendments were made and revised
questionnaires were sent to potential respondents.
A copy of the questionnaire is attached in Appendix A.
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4.7 Sampling
The sampling process begins with a definition of the population of concern. For this research
paper, the population will include all citizens and permanent residents of Singapore, holding
at least one credit card.
There are two broad categories of sampling procedures:
Probability Sampling
In a probability sampling, every unit in the population has a chance (greater than zero) for
being selected. There are several types of probability sampling, such as simple random
sampling, systematic sampling, stratified sampling and cluster sampling.
Non Probability Sampling
Non probability sampling refers to sampling methods whereby the probability of selection
cannot be accurately determined. As such, samples may not be “representative” of the
population concerned. (Ghauri & Grönhaug, 2005 p.146) Some examples of non probability
sampling include convenience sampling, quota sampling and judgement sampling.
In this research paper, convenience sampling is applied. This type of sampling is also known
as accidental sampling. It involves selecting samples from the part of the population that is
easily available and conveniently reachable.
4.8 Collation of Responses
The survey was conducted from May 11, 2009 till May 24, 2009. A sample size of 200 was
planned to be achieved.
Only a 100% completed questionnaire will be accepted. Some respondents had omitted the
question on income level due to sensitivity. And hence, such samples were excluded.
Credit Card Reward Program in Singapore – The Consumers’ Choice
37
A handful of the respondents misinterpreted the last question on ranking of reward
programs according to their preferences. Instead of ranking each of the 4 reward programs
as rank 1 to rank 4, they chose the same rank for more than one of the reward programs.
For instance, a respondent ranked both Cash Rebates and Instant Benefits as the first choice.
For such cases, respondents were contacted to make the necessary amendments. Those
which are not contactable will be discarded.
In total, 179 usable questionnaires were collected. This represents a response rate of
approximately 90%.
4.9 Limitation of research methodology
Sampling Method
Convenience sampling is often used when researchers are faced with the constraints of
time and resources. It, being a non probability sampling has several limitations. As
mentioned earlier, the chosen samples may not be representative of the population. Hence,
it may not be appropriate to generalize the results to the entire population.
Data collection
A self-administered questionnaire poses several limitations too. Errors due to non-response
may exist. People who choose to respond on the survey may have distinctly different
opinions and preference from people who do not respond. This may adversely biased the
data collected.
Sample Size
A sample size of 179 may not be sufficient to represent the entire population.
Data Source
Due to unavailability of data, some indirect source of secondary data was cited rather than
the original source. This will undermine the reliability of the data to a certain extent.
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CHAPTER FIVE
RESEARCH FINDINGS &
ANALYSIS
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CHAPTER FIVE: RESEARCH FINDINGS AND ANALYSIS
5.1 Introduction
In this chapter, research findings obtained from the conduct of the questionnaire will be
tabulated, discussed and analysed. Pie charts and bar charts are used to provide a clearer
illustration of the data.
As a starting point, the demographic profile of the respondents will be examined. This will
be followed by a presentation and detailed analysis of each of the 6 research hypotheses
listed in Section 1.4. The sequence of discussion will pursue the flow of the research
hypotheses.
Primary data collected are tabulated in frequency and cumulative frequency tables and will
be presented in Appendix B. Appendix B is organised according to the different sections of
the questionnaire.
5.2 Demographic profiles
5.2.1 Gender
Figure 5-1: Gender distribution of respondents
44%
56%
Gender
Male
Female
Credit Card Reward Program in Singapore – The Consumers’ Choice
40
Out of 179 respondents, 56% (101 respondents) are female while 44% (78 respondents) are
male.
5.2.2 Age Group
Figure 5-2: Age Group of Respondents
In accordance to the credit and charge card regulation stipulated by MAS (MAS, 2004b), a
credit cardholder in Singapore needs to have an annual income of at least SGD 30,000 for
those below the age of 55. An average graduate school leaver is 22 years old and an average
diploma leaver is 20 years old. It will normally require a diploma holder to work for a few
years before attaining an annual income of SGD 30,000. This explains why there are no
respondents below the age of 22 years old since their income level may not qualify them for
a credit card.
A majority of the respondents (72%) belongs to the age group of 22 to 39. This group forms
the major working class in Singapore.
36%
36%
15%
13%
Age Group
22 -29
30 - 39
40 - 49
50 and Above
Credit Card Reward Program in Singapore – The Consumers’ Choice
41
5.2.3 Annual Income Level
As illustrated by the pie chart in Figure 5-3 below, the income level of respondents are
rather evenly distributed. A major portion (77%) of the respondents is earning an annual
income of SGD 40,000 and above. A minority 8% of the respondents earned an annual
income of less than SGD 30,000. This group is made up of senior citizens aged 55 years old
and above and supplementary card holders. According to Credit and Charge Cards
Regulations, individuals above the age of 55 years old are required to have an annual
income of at least SGD 15,000 instead of the higher SGD 30,000 requirement. (MAS, 2004b)
Also, supplementary cardholders are exempted from the minimum income requirement of
SGD 30,000 since they will be sharing the credit limit with the main cardholders.
Supplementary cardholders form part of the population for this research since they have a
choice in the usage of cards too.
Figure 5-3: Annual Income Level Distribution of Respondents
All of the 179 respondents are Singapore residents (i.e.: They are either Singapore citizens
or permanent residents of Singapore) and each holds at least one credit card in Singapore.
These have been confirmed through the questionnaire.
8%15%
18%
22%
18%
19%
Income LevelLess than S$ 30,000
Between S$30,000 to S$39,999
Between S$40,000 to S$49,999
Betweem S$50,000 to S$59,999
Between S$60,000 to S$69,999
S$70,000 and above
Credit Card Reward Program in Singapore – The Consumers’ Choice
42
5.3 Hypothesis 1
The first hypothesis of this research paper aims to find out whether females are more
attracted by reward programs as compared to males. Four questions in “Section II
Perceptions of Reward Programs” of the questionnaire were employed to test this
hypothesis.
Firstly, respondents were asked whether the attractiveness of reward programs is one of
the reasons for their choice of a credit card. Data obtained from male and female
respondents were segregated and illustrated in the 100% stacked columns in Figure 5-4
below. A 100% stacked column allows the comparison of percentage contributed by each
value to a total across categories. Here, it was shown that a greater proportion of females
(79%) had a positive answer; as compared to male respondents (36%).
Figure 5-4: Attractiveness of reward programs as one of the reason for choice of credit card
Next, respondents were asked if they are aware of the types of reward programs offered by
their credit cards. Again, a higher percentage of female respondents (82%) were aware as
compared to male respondents (58%).
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Female Male
Is the attractiveness of Reward Programs one of the reason for your choice of credit card?
No
Yes
Credit Card Reward Program in Singapore – The Consumers’ Choice
43
Figure 5-5: Awareness of types of reward programs offered by credit cards
Following which, respondents were asked if they have been utilising the reward programs.
71% of the female respondents acknowledged that they have been utilising the reward
programs as compared to 60% of the male respondents who agreed likewise.
Figure 5-6: Utilisation of reward programs
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Female Male
Are you aware of the types of reward programs offered by your credit cards?
No
Yes
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Female Male
Have you been utilising the reward programs for your credit cards?
No
Yes
Credit Card Reward Program in Singapore – The Consumers’ Choice
44
Lastly, respondents were enquired if the type of reward programs influences their choice of
card to use during a purchase. Results show that 85% of the female respondents answered
yes to this question as compared to a 44% of male respondents.
Figure 5-7: Type of reward programs influence choice of card to use during purchase
A chi square test (X2) will be conducted to further validate the results obtained above. A chi
square statistic is used to determine if a distribution of observed frequencies differs from
the expected frequencies. Chi Square statistics uses nominal (categorical) or ordinal data.
Therefore, frequencies are used for computation rather than means and variances. It is
appropriate to use chi square test here as the two variables of concern, gender of
respondents and interest towards point accumulation reward program, are nominal data.
The formula for chi square test is as follows:
Where n = number of possible outcomes for each events
Oi = observed frequency
Ei = expected frequency
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Female Male
Does the type of Reward Programs influence your choice of card to use during a purchase?
No
Yes
Credit Card Reward Program in Singapore – The Consumers’ Choice
45
Computation of chi square tests for each of the above 4 questions are shown in Appendix B.
Results shows that at 0.05 level of significance, we are able to reject the null hypothesis that
females and males are equally attracted by reward programs.
With this, we can conclude that Singapore females are more attracted by reward programs
as compared to their male counterparts. It has been established that females consider
attractiveness of reward programs as one of the deciding factor in their choice of credit
cards both during application and during point of purchase. Also, they seem to be more
aware of the type of rewards offered and have a higher degree of utilisation of the reward
programs.
5.4 Hypothesis 2
Hypothesis 2 aims to find out whether Singapore males prefer immediate reward programs
(Cash Rebates and Instant Benefits) over delayed ones (Point Accumulation and Air Miles
Accumulation). The last section of the questionnaire requires all respondents to rank the
four different types of reward programs in order of preference. Results for male
respondents were singled out for analysis. The figure below shows the ranking order for
each of the four types of reward programs among Singapore males.
Figure 5-8: Order of Preferences for Male Respondents
0
10
20
30
40
50
60
70
Rank 1 Rank 2 Rank 3 Rank 4
No
. Of
Re
spo
nd
en
ts
Most Preferred ------------ Least Preferred
Order of Preference for Male Respondents
Cash Rebates
Instant Benefits
Points Accumulation
Air Miles Accumulation
Credit Card Reward Program in Singapore – The Consumers’ Choice
46
As shown in the diagram above, cash rebates and instant benefits are ranked highly (Rank 1
and 2) by most male respondents. Conversely, point and air miles accumulation are ranked
lowly (Rank 3 and 4). 95% of all male respondents ranked cash rebates and instant benefits
as their top choice. This is in contrast to only a mere 5% who ranked point accumulation and
air miles accumulation as their most preferred option.
The above results can be further supported and explained by data obtained in section III of
the questionnaire.
Under the cash rebate program, respondents were required to state their degree of
agreement to the following question: Cash rebate appeals to me because it is hassle free as
rebates will be automatically credited into my card. The chart below depicts the responses
from all male respondents. 83% of all male respondents agree that cash rebate is appealing
as it is hassle free as compared to an accumulation program. Rebates will be automatically
credited into the card which can be used for the next purchase at participating outlets or
sent to the cardholder via a cheque. This saves the cardholder the trouble of having to keep
track of the number of points they have and also the bothersome process of redeeming
accumulated points.
Figure 5-9: Males Respondents who prefer cash rebate due to its hassle free nature
Next, in order to further validate the results obtained, respondents were given an opposing
statement: I don’t like cash rebate program as I can never figure out how it works.
0
10
20
30
40
No
. Of
Re
spo
nd
en
ts
Strongly Disagree -------------- Strongly Agree
Cash rebate appeals to me because it is hassle free
Strongly Disagree
Disagree
Somewhat Disagree
Neutral
Somewhat Agree
Agree
Strongly Agree
Credit Card Reward Program in Singapore – The Consumers’ Choice
47
Responses were as follows in the figure below. 76% of the respondents disagree with the
statement. Majority of the male respondents understand how cash rebate program works.
As shown in Appendix B, a mean score of 6 was computed for the statement “Cash Rebate
appeals to me because it is hassle free”. This indicates that male respondents, on average,
“agree” to the statement. A mean score of 3 was computed for the statement “I don’t like
cash rebate program as I can never figure out how it works”. Male respondents, on average,
“somewhat disagree” with this statement.
Figure 5-10: Male respondents who dislike cash rebate as they can never figure how it works
With regards to instant benefits, respondents were asked if the attractive discount that they
receive at retail outlets is one of the reasons that entice them to sign up for a particular card.
Here, 73% of the male respondents agree. A mean score of 5 was computed as shown in
Appendix B. This indicates that respondents, on average, “somewhat agree” that one of the
reason that entice them to sign up for a particular credit card is due to the attractive
discounts that they are entitled to at retail outlets.
0
5
10
15
20
25
30
No
. Of
Re
spo
nd
en
ts
Strongly Disagree --------- - Strongly Agree
I don't like cash rebate program as I can never figure out how it works
Strongly Disagree
Disagree
Somewhat Disagree
Neutral
Somewhat Agree
Agree
Strongly Agree
Credit Card Reward Program in Singapore – The Consumers’ Choice
48
Figure 5-11: Male Respondents who sign up for a card due to attractive retail discounts
Responses to questions raised on point accumulation program obtained consistent results.
As illustrated in Figure 5-12 below, 66% (representing a mean score of 3) of the male
respondents have not been redeeming their points within the last 6 months. 62%
(representing a mean score of 5) agree that they have not been redeeming despite
accumulating sufficient points. (Please see Figure 5-13 below) This suggests that insufficient
point is not the main reason why male respondents are not redeeming. A probable reason
could be because the perceived additional value that cardholders receive from such
redemption may not be justifiable for them to spend time doing so.
Figure 5-12: Male respondents who have redeemed the points within the last 6 months
0
5
10
15
20
25
30N
o. O
f R
esp
on
de
nts
Strongly Disagree --------------Strongly Agree
I sign up for a card because of the attractive discount that i received at retail outlets
Strongly Disagree
Disagree
Somewhat Disagree
Neutral
Somewhat Agree
Agree
Strongly Agree
0
5
10
15
20
25
No
. Of
Re
spo
nd
en
ts
Strongly Disagree ------------ Strongly Agree
I have redeemed the points on my card within the last 6 months
Strongly Disagree
Disagree
Somewhat Disagree
Neutral
Somewhat Agree
Agree
Strongly Agree
Credit Card Reward Program in Singapore – The Consumers’ Choice
49
Figure 5-13: Male respondents who have not been redeeming despite sufficient points
From the above analysis, it can be concluded that males prefer immediate rewards over
delayed ones.
5.5 Hypothesis 3
Hypothesis 3 aims to determine if a correlation exist between preference for point
accumulation program and age group. The Spearman’s rank correlation coefficient, also
known as Spearman’s Rho denoted by the Greek letter ρ will be employed to measure the
degree of linear dependence between the two variables. Spearman’s Rho is used due to
several reasons. Firstly, it is a non-parametric measure of correlation. It does not rely on
assumptions that the data are drawn from a given probability distribution. (I.e. it does not
assume normality in the distribution of data). Also, it is a more suitable form of correlation
test as compared to Pearson’s product-moment coefficient which requires data to be either
of an interval or ratio level of measurement. Here, the two variables of concern, age group
and preference for point accumulation program, are considered ordinal data. Spearman’s
Rho is thus the most suitable form of correlation test. In fact, the Spearman’s Rho is actually
a special case of Pearson’s product-moment coefficient in which data are converted to ranks
before the coefficient is being calculated.
0
5
10
15
20
25N
o. O
f R
esp
on
de
nts
Strongly Disagree -------------- Strongly Agree
I have not been redeeming despite accumulating sufficient points
Strongly Disagree
Disagree
Somewhat Disagree
Neutral
Somewhat Agree
Agree
Strongly Agree
Credit Card Reward Program in Singapore – The Consumers’ Choice
50
Data obtained from the last section of the questionnaire would be used to test this
hypothesis. The two variables will be defined as age group of respondents (Variable X) and
ranking for point accumulation program (Variable Y). Because tied ranks exist in our data,
the formula for Spearman’s Rho (as shown below) cannot be used.
di = xi − yi = the difference between the ranks of corresponding values Xi and Yi, n = the number of values in each data set (same for both sets)
Rather, the Pearson’s correlation coefficient formula will be applied using the “ranks”. This
is as opposed to Pearson’s r which uses “raw data” to compute coefficient of correlation.
Results were tabulated and computed in Appendix C. The coefficient of correlation amounts
to 0.168.
Coefficient of correlation ranges from the values of -1 to +1. Coefficients that are close to +1
denote a strong positive correlation whereas coefficients nearer to -1 denote a strong
negative correlation. In this case, a coefficient of 0.168 denotes a very weak linear
relationship.
We are therefore unable to accept that hypothesis that a strong correlation exists between
age group and preference for point accumulation program.
Credit Card Reward Program in Singapore – The Consumers’ Choice
51
5.6 Hypothesis 4
Hypothesis 4 aims to determine if a correlation exist between preference for point
accumulation program and income level. Again, the Spearman’s Rho will be adopted to
measure the degree of linear relationship between these two variables. Results were
tabulated and computed in Appendix C. The coefficient of correlation amounts to -0.036.
This is considered a very weak correlation.
Again, we are unable to accept the hypothesis that a strong correlation exists between
income level and preference for point accumulation program.
5.7 Hypothesis 5
The fifth hypothesis seeks to measure the level of preference for air miles accumulation
program as compared to the other 3 types of programs, namely point accumulation
program, cash rebates and instant benefits. The last section of the questionnaire requires
respondents to rank the different types of reward programs in order of their preference.
The pie chart in Figure 5-14 exemplifies that 89% of all respondents ranked air miles
accumulation as the least preferred type of reward program. With only 1 respondent
ranking it as the most preferred (0.55%) and the second most preferred (0.55%), as well as a
mere 10% (18 respondents) ranking it in the third place, we can conclude that air miles
accumulation is the least preferred type of reward program among cardholders. This can be
further supported by Figure 5-15 which shows the ranking order for the 4 different types of
reward programs. It is clear that cash rebate program emerge to be the most preferred type
among cardholders. This is followed by instant benefits, point accumulation and lastly, air
miles accumulation.
Credit Card Reward Program in Singapore – The Consumers’ Choice
52
Figure 5-14: Ranking of air miles accumulation program
Figure 5-15: Ranking order of 4 types of reward programs
In Section III of the questionnaire, questions were raised with regards to respondents’
attitude towards air miles accumulation program. Analysing responses to these statements
allow us to better understand why air miles accumulation is the least preferred type of
reward program among cardholders.
Respondents are required to state the extent to which they agree with the statements.
Frequency tables tabulating the results are shown in Appendix B. The findings include the
following: 75% of the respondents agree that they have never redeemed air miles before as
0%1%
10%
89%
Air Miles Accumulation Program
Rank 1
Rank 2
Rank 3
Rank 4
0
20
40
60
80
100
120
140
160
180
Rank 1 Rank 2 Rank 3 Rank 4
No
. Of
Re
spo
nd
en
ts
Most Preferred ---------- Least Preferred
Ranking Order of 4 types of Reward Programs
Cash Rebate
Instant Benefits
Points Accumulation
Air Miles Accumulation
Credit Card Reward Program in Singapore – The Consumers’ Choice
53
they usually do not spend enough. 82% of the respondents agree that it is a pain to redeem
air miles due to the complicated procedure. Lastly, 77% of the respondents agree that the
various date and route restrictions reduce the attractiveness of the air miles accumulation
program. A mean score of 5 was derived from each of the above 3 statements raised with
regards to air miles accumulation as shown in Appendix B. This indicates that respondents,
on average, “somewhat agree” to the statements raised.
The complicated redemption process and the inflexible nature of air miles redemption
prove to lower its attractiveness.
5.8 Hypothesis 6
Hypothesis 6 aims to find out whether monetary rewards appeals to consumer more than
non-monetary rewards. Respondents were posed 3 statements relating to their preferences.
Firstly, they were asked if they prefer cash vouchers redemption to product redemption.
Figure5-16 below illustrates a histogram which tabulates their responses. It can be seen
clearly that the distribution is negatively skewed. This means that more respondents are in
favour of cash vouchers redemption (monetary reward) as compared to product
redemptions (non-monetary reward). A total of approximately 76% of the respondents
agree to the statement in varying degree as compared to a 7% who disagreed. The
remaining 17% is indifferent.
Figure 5-16: Preference between cash vouchers and product redemptions
0
20
40
60
No
. of
Re
spo
nd
en
ts
Strongly Disagree --------------- Strongly Agree
I would prefer to redeem cash vouchers rather than product redemptions
Strongly Disagree
Disagree
Somewhat Disagree
Neutral
Somewhat Agree
Agree
Strongly Agree
Credit Card Reward Program in Singapore – The Consumers’ Choice
54
The second statement was raised to ensure respondents had a clear understanding of what
is termed “monetary rewards” and “non-monetary rewards”. Here, respondents were given
some examples of non-monetary rewards that include priority queues and preferred seating.
Results obtained were similar to the previous question with a larger proportion (83%) of
respondents agreeing. A minority of 6% disagree with the statement.
Figure 5-17: Appeal between monetary and non-monetary rewards
The last statement was raised to determine the rationale behind consumers’ preference.
Flexibility, being the advantage of a monetary reward, is one of the reasons behind their
preference. 73% of the respondents agree to the statement.
0
20
40
60
80
No
. of
Re
spo
nd
en
ts
Strongly Disagree ------------ Strongly Agree
Non-monetary rewards (such as priority queue, preferred seating) do not appeal to me
as much as monetary rewards
Strongly Disagree
Disagree
Somewhat Disagree
Neutral
Somewhat Agree
Agree
Strongly Agree
Credit Card Reward Program in Singapore – The Consumers’ Choice
55
Figure 5-18: Preference of monetary rewards to non-monetary ones due to its flexibility
A mean score of 5 was derived from the computation of each of the above 3 questions as
shown in Appendix B. This suggest that respondents on average, “somewhat agree” to the
statements.
From the analysis of the 3 questions above using mean score of respondents as well as the
percentage of respondents agreeing with the statements, we can conclude that cardholders
in general, prefer monetary rewards to non-monetary ones.
0
10
20
30
40
50
60
70N
o. o
f R
esp
on
de
nts
Strongly Disagree ------------------- Strongly Agree
I prefer monetary rewards to non-monetary ones as they offer more flexibility
Strongly Disagree
Disagree
Somewhat Disagree
Neutral
Somewhat Agree
Agree
Strongly Agree
Credit Card Reward Program in Singapore – The Consumers’ Choice
57
CHAPTER SIX: CONCLUSION
6.1 Summary and Findings
To summarise, this study on credit card reward programs in Singapore found that
immediate rewards which includes cash rebates and instant benefits are more well-liked by
cardholders. This could be due to the hassle free nature of immediate rewards. Unlike point
and air miles accumulation, immediate rewards saved cardholders from the trouble of
keeping track of the number of points they have accumulated and going through the
redemption process. Consequently, air miles accumulation is the least preferred type of
reward among cardholders. The complicated and tedious redemption process as well as the
various date and route restrictions reduces the attractiveness of the air miles program.
Monetary rewards which includes discounts and cash vouchers appeals more to cardholders
in Singapore than non-monetary ones. The flexible nature of monetary rewards served as
one of the reason.
Analysis by demographics shows that females are more attracted by reward programs as
compared to their male counterparts. However, there is no strong correlation between
preference for point accumulation program and age group as well as the level of income of
respondents.
Some findings from this study are similar to that conducted by First Data Competitive
Intelligence and TNS as mentioned previously in the literature review. Similar to US
consumers, cash back reward program emerged to be the most preferred reward program
among Singapore consumers too. However, instant benefit is the least preferred among US
consumers according to a survey conducted by First Data Competitive Intelligence.
Singapore consumers on the other hand, ranked instant benefits as the second most
preferred type of reward.
Credit Card Reward Program in Singapore – The Consumers’ Choice
58
6.2 Recommendations
It is apparent from this study that Singapore cardholders prefer immediate rewards to
delayed ones. In order for card issuers to increase their market share, they have to realign
their strategies to take into consideration cardholders’ preferences.
Rather than placing their emphasis on air miles accumulation, card issuers should consider
redirecting their focus towards the more well-liked reward program instead. This may
include expanding their tied-ups with major retailers to provide cardholders with discounts
upon purchases. Research can be carried out to determine the retailers that are frequently
patronized by their cardholders. Tied-up arrangements made with these retailers will be
able to tempt cardholders to use their card; making it the “top of the wallet” choice.
Also, card issuers may consider channelling their resources away from non-monetary
rewards to provide more monetary ones. They may also consider strengthening their cash
rebate program through increasing awareness and understanding of this program.
6.3 Areas for further research
This study is conducted specifically in the Singapore context. Hence, results cannot be
generalized across different countries and continents. Future researchers may seek to
explore consumer preference across different countries and regions to determine if cultural
differences play a role in consumers’ choice of rewards. This will be especially useful for
international card issuers as they will be able to adopt different strategies for each of their
diversified market.
Future research may also adopt a more qualitative approach to further understand the
rationale behind customers’ preferences. Researchers may look into the reasons why a
particular reward program is not well-accepted. A more in-depth understanding may allow
card issuers to enhance their reward programs which will bring about better satisfaction of
the customers.
Credit Card Reward Program in Singapore – The Consumers’ Choice
59
The current research emphasizes on existing cardholders’ preferences of reward programs.
Future researchers may investigate the preferences of potential cardholders such as the
undergraduates who may form a major source of income for the banks.
It will also be interesting to explore new types of reward programs that may attract
customers other than the existing ones.
Credit Card Reward Program in Singapore – The Consumers’ Choice
61
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Monetary Authority of Singapore (2009), Credit and Charge Card Statistics (Online)
Retrieved from: https://secure.mas.gov.sg/apps/msb-xml/view.jsp (Access date: 12/05/09)
O’Malley, L. (1998), “Can Loyalty Schemes Really Build Loyalty?” Marketing Intelligence and
Planning, Vol 16 No.1, pp.47-55 Reichardt, C.S. and Cook, T.D. (1979), “Beyond Qualitative and Quantitative Methods’, in
Cook, T.D. and Reichardt, C.S (Ed), Qualitative and Quantitative Methods in Evaluation Research, pp.7-32 Beverly Hills, CA: Sage
Sharp, Byron. and Sharp, A. (1997), "Loyalty Programs and Their Impact on Repeat-Purchase
Loyalty Patterns", International Journal of Research in Marketing, Vol.14 No.5 pp.473-86
Simon, J. (2006), “Credit Card Reward Program, A Short History”, (Online) Retrieved from:
http://www.creditcards.com/credit-card-news/reward-programs-a-short-history-1277.php (Access date: 16/05/09)
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(Online) Retrieved from: http://www.singstat.gov.sg/pubn/reference/mdsapr09.pdf (Access date: 15/05/09)
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http://www.tescoplc.com/plc/about_us/tesco_story/ (Access date: 4/6/09) TNS Global (2009), “When it comes to Credit Card Rewards, Cash is King” (Online) Retrieved
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Credit Card Reward Program in Singapore – The Consumers’ Choice
64
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229-240
Credit Card Reward Program in Singapore – The Consumers’ Choice
66
APPENDICES
APPENDIX A – QUESTIONNAIRE
CREDIT CARD REWARD PROGRAM SURVEY
Good day. As part of my MBA thesis at Blekinge Institute of Technology, I am conducting a survey on
credit card reward program in Singapore. I would appreciate if you could spend a couple of minutes
to answer them. Please be assured that all responses will be kept strictly confidential. Thank you.
Section I: Background Information
(1) Gender : Male Female
(2) Age Group:
Below 22
Between 22 – 29
Between 30-39
Between 40 - 49
50 And above
(3) Annual Income Level (In SGD) :
Less than 30,000
Between 30,000 to 39,999
Between 40,000 to 49,999
Between 50,000 to 59,999
Between 60,000 to 69,999
70,000 and above.
(4) Are you a Singapore resident (i.e. Singapore Citizen Or Permanent Resident)
Yes No
Section II: Perceptions of Reward Programs
(1) Do you own at least one credit card?
Yes No
(2) Is the attractiveness of the reward programs one of the reason for your choice of credit cards?
Yes No
(3) Are you aware of the types of reward programs offered by your credit cards?
Yes No
Credit Card Reward Program in Singapore – The Consumers’ Choice
67
(4) Have you been utilising the reward programs for your credit cards?
Yes No
(5) Does the type of reward programs influence your choice of card to use during a purchase?
Yes No
Section III: Different Types of Reward Programs
On a scale of 1 to 7, please state to what extent you agree or disagree with the following statements.
(1) Point Accumulation Program
In a point accumulation program, points will be awarded for purchases made using the card.
Sufficient points accumulated can be redeemed for vouchers or merchandise.
Strongly Disagree
1
Disagree 2
Somewhat Disagree
3
Neutral 4
Somewhat Agree
5
Agree 6
Strongly Agree
7
I am constantly keeping track of the amount of points I have accumulated in my card.
I know the procedures for redemption of my points.
I have redeemed the points on my card within the last 6 months.
I have not been redeeming despite accumulating sufficient points.
I often do not spend enough to accumulate sufficient points for redemptions.
The redemption procedure is too complex.
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(2) Air miles Accumulation Program
In an air miles accumulation program, air miles can be earned for purchases made using the card.
Sufficient air miles earned can entitle cardholder to a free ticket, discounted upgrades, access to first
class lounges etc.
Strongly Disagree
1
Disagree 2
Somewhat Disagree
3
Neutral 4
Somewhat Agree
5
Agree 6
Strongly Agree
7
I have never redeemed air miles before as I usually don’t spend enough.
It is a pain to redeem air miles due to the complicated procedure.
I have successfully redeemed my air miles in the past 12 months.
The various date and route restrictions reduce the attractiveness of air miles program.
(3) Cash Rebate Program
In a cash rebate program, rebates are credited back into the card for purchases made. They can be
used to offset credit card bills or sent to the cardholder in the form of a cheque. Some cash rebates
can only be used to offset the next purchase in participating outlets.
Strongly Disagree
1
Disagree 2
Somewhat Disagree
3
Neutral 4
Somewhat Agree
5
Agree 6
Strongly Agree
7
Cash rebate appeals to me because it is hassle free as rebates will be automatically credited into my card.
I don’t like cash rebate program as I can never figure out how it works.
Credit Card Reward Program in Singapore – The Consumers’ Choice
69
I prefer cash rebates that can be used to offset bills than rebates that can only be used to offset next purchase in participating outlets.
(4) Instant Benefits
Instant benefits includes discount at point of purchase (E.g. 5% petrol discount, 20% off total bill.)
Strongly Disagree
1
Disagree 2
Somewhat Disagree
3
Neutral 4
Somewhat Agree
5
Agree 6
Strongly Agree
7
I sign up for a card because of the attractive discount that I received at retail outlets.
Section IV: Monetary Vs Non-monetary Rewards
Monetary rewards include cash rebates, discounts, product cash vouchers and lucky draws with
monetary prizes.
Non-monetary rewards include priority queue, private sales events, privileged services, product
redemptions, and lucky draws with merchandise such as car, an air ticket or a hotel stay as a prize.
Strongly Disagree
1
Disagree 2
Somewhat Disagree
3
Neutral 4
Somewhat Agree
5
Agree 6
Strongly Agree
7
I would prefer to redeem cash vouchers (dining, shopping voucher) rather than product redemptions (such as ipod, digital camera or a bottle of vintage wine of the same value.)
Non-monetary rewards such as priority queues, preferred seating does not appeal to me as much as monetary rewards.
I prefer monetary rewards to non-monetary ones as they offer more flexibility.
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70
Section V: Order of Preference
(1) Please rank the following types of reward programs in order of preference. With 1 being the
most preferred type and 4 being the least preferred type.
Cash Rebates Choose a Ranking
Instant Benefits Choose a Ranking
Point Accumulation Choose a Ranking
Air miles Accumulation Choose a Ranking
Thank You for Your Time
Credit Card Reward Program in Singapore – The Consumers’ Choice
71
APPENDIX B – RESULTS OBTAINED FROM QUESTIONNAIRE
Section I
Gender of Respondents
No. of Respondents Percentage
Cumulative
Percentage
Male 78 44% 44%
Female 101 56% 100%
Total 179 100%
Age Group of Respondents
No. of Respondents Percentage Cumulative
Percentage
Between 22 – 29 64 36% 36%
Between 30 – 39 64 36% 72%
Between 40 – 49 28 15% 87%
50 and Above 23 13% 100%
Total 179 100%
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Annual Income level of Respondents
No. of respondents Percentage Cumulative
Percentage
Below SGD 30,000 14 8% 8%
Between SGD 30,000
to 39,000
26 15% 23%
Between SGD 40,000
to 49,999
33 18% 41%
Between SGD 50,000
to 59,000
39 22% 63%
Between SGD 60,000
to 69,999
33 18% 81%
SGD 70,000 and
above
34 19% 100%
Total 179 100%
Credit Card Reward Program in Singapore – The Consumers’ Choice
73
Section II
Cross Tabulation between Gender and Attractiveness of reward programs as one of the
reason for choice of credit card
Yes No Total
Female 80 21 101
Male 28 50 78
Total 108 71 179
Cross Tabulation between Gender and Awareness of reward programs
Yes No Total
Female 83 18 101
Male 45 33 78
Total 128 51 179
Cross Tabulation between Gender and Utilisation of reward programs
Yes No Total
Female 72 29 101
Male 47 31 78
Total 119 60 179
Credit Card Reward Program in Singapore – The Consumers’ Choice
74
Cross Tabulation between Gender and whether the type of reward programs influences the
choice of card to use during a purchase
Yes No Total
Female 86 15 101
Male 34 44 78
Total 120 59 179
Chi Square Tests: To determine if females are more attracted by reward programs Null Hypothesis: Both males and females are equally attracted by reward programs Alternate Hypothesis: Females are more attracted by reward programs
Chi Square
Test
Degree of
Freedom
Significance
Level
Critical
Value
Reject Null
Hypothesis?
Attractiveness
of reward
programs is one
of the reason
for the choice of
a credit card
38.363 1 0.05 3.841
Yes.
38.363>
3.841
Awareness of
reward
programs
17.419 1 0.05 3.841
Yes.
17.419>
3.841
Utilisation of
reward
programs
9.166 1 0.05 3.841 Yes.
9.166>3.841
Type of reward
programs
influence choice
of card to use
during a
purchase
38.827 1 0.05 3.841 Yes.
38.827>3.841
Credit Card Reward Program in Singapore – The Consumers’ Choice
75
Section III
(1) Point Accumulation Program
I have redeemed the points on my card within the last 6 months. (Male Respondents)
No. of Respondents Percentage Cumulative
Percentage
Strongly Disagree 17 22% 22%
Disagree 20 26% 48%
Somewhat Disagree 14 18% 66%
Neutral 4 5% 71%
Somewhat Agree 7 9% 80%
Agree 8 10% 90%
Strongly Agree 8 10% 100%
Total 78 100%
I have not been redeeming despite accumulating sufficient points. (Male Respondents)
No. of Respondents Percentage Cumulative
Percentage
Strongly Disagree 9 12% 12%
Disagree 7 9% 21%
Somewhat Disagree 8 10% 31%
Neutral 6 7% 38%
Somewhat Agree 20 26% 64%
Agree 15 19% 83%
Strongly Agree 13 17% 100%
Total 78 100%
Credit Card Reward Program in Singapore – The Consumers’ Choice
76
Mean score of the above 2 statements with respect to Point Accumulation
I have redeemed the points on my card
within the last six months (Male
Respondents Only)
I have not been redeeming despite
accumulating sufficient points (Male
Respondents Only)
Points
Allocated
No. of Respondents Total Points No. of Respondents Total Points
Strongly
Disagree (1) 17 17 9 9
Disagree (2) 20 40 7 14
Somewhat
Disagree (3) 14 42 8 24
Neutral (4) 4 16 6 24
Somewhat
Agree (5) 7 35 20 100
Agree (6) 8 48 15 90
Strongly Agree
(7) 8 56 13 91
Total 78 254 78 352
Mean 3.26 4.51
(2) Air Miles Accumulation Program
I have never redeemed air miles before as I usually don’t spend enough.
No. of Respondents Percentage Cumulative
Percentage
Strongly Disagree 9 5% 5%
Disagree 15 8% 13%
Somewhat Disagree 7 4% 17%
Neutral 14 8% 25%
Somewhat Agree 25 14% 39%
Agree 79 44% 83%
Strongly Agree 30 17% 100%
Total 179 100%
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It is a pain to redeem air miles due to the complicated procedure.
No. of Respondents Percentage Cumulative
Percentage
Strongly Disagree 5 3% 3%
Disagree 7 4% 7%
Somewhat Disagree 9 5% 12%
Neutral 11 6% 18%
Somewhat Agree 34 19% 37%
Agree 85 47% 84%
Strongly Agree 28 16% 100%
Total 179 100%
The various date and route restrictions reduce the attractiveness of air miles program.
No. of Respondents Percentage Cumulative
Percentage
Strongly Disagree 9 5% 5%
Disagree 11 6% 11%
Somewhat Disagree 9 5% 16%
Neutral 12 7% 23%
Somewhat Agree 41 23% 46%
Agree 63 35% 81%
Strongly Agree 34 19% 100%
Total 179 100%
Credit Card Reward Program in Singapore – The Consumers’ Choice
78
Mean score for each of the 3 statements above with respect to Air Miles Accumulation
I have never redeem air
miles before as I usually
don’t spend enough
It is a pain to redeem air
miles due to the
complicated procedure
The various date and route
restriction reduces the
attractiveness of air miles
program
Points
Allocated
No. of
Respondents
Total
Points
No. of
Respondents
Total
Points
No. of
Respondents
Total
Points
Strongly
Disagree (1) 9 9 5 5 9 9
Disagree (2) 15 30 7 14 11 22
Somewhat
Disagree (3) 7 21 9 27 9 27
Neutral (4) 14 56 11 44 12 48
Somewhat
Agree (5) 25 125 34 170 41 205
Agree (6) 79 474 85 510 63 378
Strongly
Agree (7) 30 210 28 196 34 238
Total 179 925 179 966 179 927
Mean 5.17 5.40 5.18
(3) Cash Rebates Program
Cash rebate appeals to me because it is hassle free. (Male Respondents)
No. of Respondents Percentage Cumulative
Percentage
Strongly Disagree 2 3% 3%
Disagree 3 4% 7%
Somewhat Disagree 3 4% 11%
Neutral 5 6% 17%
Somewhat Agree 9 11% 28%
Agree 20 26% 54%
Strongly Agree 36 46% 100%
Total 78 100%
Credit Card Reward Program in Singapore – The Consumers’ Choice
79
I don’t like cash rebate program as I can never figure out how it works. (Male Respondents)
No. of Respondents Percentage Cumulative
Percentage
Strongly Disagree 22 28% 28%
Disagree 24 31% 59%
Somewhat Disagree 13 17% 76%
Neutral 11 14% 90%
Somewhat Agree 3 4% 94%
Agree 3 4% 98%
Strongly Agree 2 2% 100%
Total 78 100%
Mean Score for the 2 statements above with respect to Cash Rebates
Cash Rebate appeals to me because it is
hassle free (Male Respondents Only)
I don’t like cash rebate program as I
can never figure out how it works
(Male Respondents Only)
Points Allocated No. of Respondents Total Points No. of
Respondents
Total Points
Strongly Disagree (1) 2 2 22 22
Disagree (2) 3 6 24 48
Somewhat Disagree (3) 3 9 13 39
Neutral (4) 5 20 11 44
Somewhat Agree (5) 9 45 3 15
Agree (6) 20 120 3 18
Strongly Agree (7) 36 252 2 14
Total 78 454 78 200
Mean 5.82 2.56
Credit Card Reward Program in Singapore – The Consumers’ Choice
80
(4) Instant Benefits
I sign up for a card because of the attractive discounts I received at retail outlets. (Male
Respondents)
No. of Respondents Percentage Cumulative
Percentage
Strongly Disagree 2 3% 3%
Disagree 6 7% 10%
Somewhat Disagree 2 3% 13%
Neutral 11 14% 27%
Somewhat Agree 11 14% 41%
Agree 24 31% 72%
Strongly Agree 22 28% 100%
Total 78 100%
Mean Score for the statement above with respect to Instant Benefits
Cash Rebate appeals to me because it is hassle free
(Male Respondents Only)
Points Allocated No. of Respondents Total Points
Strongly Disagree (1) 2 2
Disagree (2) 6 12
Somewhat Disagree (3) 2 6
Neutral (4) 11 44
Somewhat Agree (5) 11 55
Agree (6) 24 144
Strongly Agree (7) 22 154
Total 78 417
Mean 5.35
Credit Card Reward Program in Singapore – The Consumers’ Choice
81
Section IV
I would prefer to redeem cash vouchers than product vouchers.
No. of Respondents Percentage Cumulative
Percentage
Strongly Disagree 2 1% 1%
Disagree 3 2% 3%
Somewhat Disagree 7 4% 7%
Neutral 30 17% 24%
Somewhat Agree 52 29% 53%
Agree 51 28% 81%
Strongly Agree 34 19% 100%
Total 179 100%
Non-monetary rewards do not appeal to me as much as monetary rewards.
No. of Respondents Percentage Cumulative
Percentage
Strongly Disagree 5 3% 3%
Disagree 2 1% 4%
Somewhat Disagree 4 2% 6%
Neutral 20 11% 17%
Somewhat Agree 26 14.5% 31.5%
Agree 69 38.5% 70%
Strongly Agree 53 30% 100%
Total 179 100%
Credit Card Reward Program in Singapore – The Consumers’ Choice
82
I prefer monetary rewards to non-monetary ones as they offer more flexibility.
No. of Respondents Percentage Cumulative
Percentage
Strongly Disagree 3 2% 2%
Disagree 6 3% 5%
Somewhat Disagree 12 7% 12%
Neutral 27 15% 27%
Somewhat Agree 34 19% 46%
Agree 65 36% 82%
Strongly Agree 32 18% 100%
Total 179 100%
Mean score for each of the 3 statements in Section IV.
I would prefer to redeem
cash vouchers than product
vouchers
Non monetary rewards do
not appeal to me as much as
monetary rewards
I prefer monetary rewards to
non-monetary ones as they
offer more flexibility
Points
Allocated
No. of
Respondents
Total
Points
No. of
Respondents
Total
Points
No. of
Respondents
Total
Points
Strongly
Disagree (1) 2 2 5 5 3 3
Disagree (2) 3 6 2 4 6 12
Somewhat
Disagree (3) 7 21 4 12 12 36
Neutral (4) 30 120 20 80 27 108
Somewhat
Agree (5) 52 260 26 130 34 170
Agree (6) 51 306 69 414 65 390
Strongly
Agree (7) 34 238 53 371 32 224
Total 179 953 179 1016 179 943
Mean 5.32 5.68 5.27
Credit Card Reward Program in Singapore – The Consumers’ Choice
83
Section V
Order of Preference by Male Respondents
Cash
Rebates
Instant
Benefits
Point
Accumulation
Air Miles
Accumulation
Total
Rank 1 42 32 3 1 78
Rank 2 20 39 18 1 78
Rank 3 15 4 46 13 78
Rank 4 1 3 11 63 78
Total 78 78 78 78
Air Miles Accumulation Program Ranking by All Respondents
No. of Respondents Percentage Cumulative
Percentage
Rank 1 1 0.5% 0.5%
Rank 2 1 0.5% 1%
Rank 3 18 10% 11%
Rank 4 159 89% 100%
Total 179 100%
Credit Card Reward Program in Singapore – The Consumers’ Choice
84
Order of Preference by All Respondents
Cash
Rebates
Instant
Benefits
Point
Accumulation
Air Miles
Accumulation
Total
Rank 1 121 51 6 1 179
Rank 2 36 112 30 1 179
Rank 3 21 12 127 19 179
Rank 4 1 4 16 158 179
Total 179 179 179 179
Credit Card Reward Program in Singapore – The Consumers’ Choice
85
APPENDIX C – SPEARMAN CORRELATION COEFFICIENT
Tabulated computation between Age Group and Preference for point accumulation program
Respondents
Age Group
(X)
Points Preference
(Y) Rank
X A = Rank X (with ties)
Rank Y
B = Rank Y (with ties) A * B A
2 B
2
1 2 1 1 32.5 1 3.5
114
1,056
12
2 2 1 2 32.5 2 3.5
114
1,056
12
3 2 1 3 32.5 3 3.5
114
1,056
12
4 2 2 4 32.5 7 21.5
699
1,056
462
5 2 2 5 32.5 8 21.5
699
1,056
462
6 2 2 6 32.5 9 21.5
699
1,056
462
7 2 2 7 32.5 10 21.5
699
1,056
462
8 2 2 8 32.5 11 21.5
699
1,056
462
9 2 2 9 32.5 12 21.5
699
1,056
462
10 2 2 10 32.5 13 21.5
699
1,056
462
11 2 2 11 32.5 14 21.5
699
1,056
462
12 2 2 12 32.5 15 21.5
699
1,056
462
13 2 2 13 32.5 16 21.5
699
1,056
462
14 2 2 14 32.5 17 21.5
699
1,056
462
15 2 2 15 32.5 18 21.5
699
1,056
462
16 2 3 16 32.5 37 100
3,250
1,056
10,000
17 2 3 17 32.5 38 100
3,250
1,056
10,000
18 2 3 18 32.5 39 100
3,250
1,056
10,000
19 2 3 19 32.5 40 100
3,250
1,056
10,000
20 2 3 20 32.5 41 100
3,250
1,056
10,000
21 2 3 21 32.5 42 100
3,250
1,056
10,000
22 2 3 22 32.5 43 100
3,250
1,056
10,000
23 2 3 23 32.5 44 100
3,250
1,056
10,000
24 2 3 24 32.5 45 100
3,250
1,056
10,000
25 2 3 25 32.5 46 100
3,250
1,056
10,000
26 2 3 26 32.5 47 100
3,250
1,056
10,000
Credit Card Reward Program in Singapore – The Consumers’ Choice
86
27 2 3 27 32.5 48 100
3,250
1,056
10,000
28 2 3 28 32.5 49 100
3,250
1,056
10,000
29 2 3 29 32.5 50 100
3,250
1,056
10,000
30 2 3 30 32.5 51 100
3,250
1,056
10,000
31 2 3 31 32.5 52 100
3,250
1,056
10,000
32 2 3 32 32.5 53 100
3,250
1,056
10,000
33 2 3 33 32.5 54 100
3,250
1,056
10,000
34 2 3 34 32.5 55 100
3,250
1,056
10,000
35 2 3 35 32.5 56 100
3,250
1,056
10,000
36 2 3 36 32.5 57 100
3,250
1,056
10,000
37 2 3 37 32.5 58 100
3,250
1,056
10,000
38 2 3 38 32.5 59 100
3,250
1,056
10,000
39 2 3 39 32.5 60 100
3,250
1,056
10,000
40 2 3 40 32.5 61 100
3,250
1,056
10,000
41 2 3 41 32.5 62 100
3,250
1,056
10,000
42 2 3 42 32.5 63 100
3,250
1,056
10,000
43 2 3 43 32.5 64 100
3,250
1,056
10,000
44 2 3 44 32.5 65 100
3,250
1,056
10,000
45 2 3 45 32.5 66 100
3,250
1,056
10,000
46 2 3 46 32.5 67 100
3,250
1,056
10,000
47 2 3 47 32.5 68 100
3,250
1,056
10,000
48 2 3 48 32.5 69 100
3,250
1,056
10,000
49 2 3 49 32.5 70 100
3,250
1,056
10,000
50 2 3 50 32.5 71 100
3,250
1,056
10,000
51 2 3 51 32.5 72 100
3,250
1,056
10,000
52 2 3 52 32.5 73 100
3,250
1,056
10,000
53 2 3 53 32.5 74 100
3,250
1,056
10,000
54 2 3 54 32.5 75 100
3,250
1,056
10,000
55 2 3 55 32.5 76 100
3,250
1,056
10,000
56 2 3 56 32.5 77 100
3,250
1,056
10,000
Credit Card Reward Program in Singapore – The Consumers’ Choice
87
57 2 3 57 32.5 78 100
3,250
1,056
10,000
58 2 3 58 32.5 79 100
3,250
1,056
10,000
59 2 3 59 32.5 80 100
3,250
1,056
10,000
60 2 4 60 32.5 164 171.5
5,574
1,056
29,412
61 2 4 61 32.5 165 171.5
5,574
1,056
29,412
62 2 4 62 32.5 166 171.5
5,574
1,056
29,412
63 2 4 63 32.5 167 171.5
5,574
1,056
29,412
64 2 4 64 32.5 168 171.5
5,574
1,056
29,412
65 3 1 65 96.5 4 3.5
338
9,312
12
66 3 1 66 96.5 5 3.5
338
9,312
12
67 3 1 67 96.5 6 3.5
338
9,312
12
68 3 2 68 96.5 19 21.5
2,075
9,312
462
69 3 2 69 96.5 20 21.5
2,075
9,312
462
70 3 2 70 96.5 21 21.5
2,075
9,312
462
71 3 2 71 96.5 22 21.5
2,075
9,312
462
72 3 2 72 96.5 23 21.5
2,075
9,312
462
73 3 2 73 96.5 24 21.5
2,075
9,312
462
74 3 2 74 96.5 25 21.5
2,075
9,312
462
75 3 2 75 96.5 26 21.5
2,075
9,312
462
76 3 2 76 96.5 27 21.5
2,075
9,312
462
77 3 2 77 96.5 28 21.5
2,075
9,312
462
78 3 2 78 96.5 29 21.5
2,075
9,312
462
79 3 2 79 96.5 30 21.5
2,075
9,312
462
80 3 2 80 96.5 31 21.5
2,075
9,312
462
81 3 3 81 96.5 81 100
9,650
9,312
10,000
82 3 3 82 96.5 82 100
9,650
9,312
10,000
83 3 3 83 96.5 83 100
9,650
9,312
10,000
84 3 3 84 96.5 84 100
9,650
9,312
10,000
85 3 3 85 96.5 85 100
9,650
9,312
10,000
86 3 3 86 96.5 86 100
9,650
9,312
10,000
87 3 3 87 96.5 87 100
9,650
9,312
10,000
Credit Card Reward Program in Singapore – The Consumers’ Choice
88
88 3 3 88 96.5 88 100
9,650
9,312
10,000
89 3 3 89 96.5 89 100
9,650
9,312
10,000
90 3 3 90 96.5 90 100
9,650
9,312
10,000
91 3 3 91 96.5 91 100
9,650
9,312
10,000
92 3 3 92 96.5 92 100
9,650
9,312
10,000
93 3 3 93 96.5 93 100
9,650
9,312
10,000
94 3 3 94 96.5 94 100
9,650
9,312
10,000
95 3 3 95 96.5 95 100
9,650
9,312
10,000
96 3 3 96 96.5 96 100
9,650
9,312
10,000
97 3 3 97 96.5 97 100
9,650
9,312
10,000
98 3 3 98 96.5 98 100
9,650
9,312
10,000
99 3 3 99 96.5 99 100
9,650
9,312
10,000
100 3 3 100 96.5 100 100
9,650
9,312
10,000
101 3 3 101 96.5 101 100
9,650
9,312
10,000
102 3 3 102 96.5 102 100
9,650
9,312
10,000
103 3 3 103 96.5 103 100
9,650
9,312
10,000
104 3 3 104 96.5 104 100
9,650
9,312
10,000
105 3 3 105 96.5 105 100
9,650
9,312
10,000
106 3 3 106 96.5 106 100
9,650
9,312
10,000
107 3 3 107 96.5 107 100
9,650
9,312
10,000
108 3 3 108 96.5 108 100
9,650
9,312
10,000
109 3 3 109 96.5 109 100
9,650
9,312
10,000
110 3 3 110 96.5 110 100
9,650
9,312
10,000
111 3 3 111 96.5 111 100
9,650
9,312
10,000
112 3 3 112 96.5 112 100
9,650
9,312
10,000
113 3 3 113 96.5 113 100
9,650
9,312
10,000
114 3 3 114 96.5 114 100
9,650
9,312
10,000
115 3 3 115 96.5 115 100
9,650
9,312
10,000
116 3 3 116 96.5 116 100
9,650
9,312
10,000
117 3 3 117 96.5 117 100
9,650
9,312
10,000
118 3 3 118 96.5 118 100
9,650
9,312
10,000
Credit Card Reward Program in Singapore – The Consumers’ Choice
89
119 3 3 119 96.5 119 100
9,650
9,312
10,000
120 3 3 120 96.5 120 100
9,650
9,312
10,000
121 3 3 121 96.5 121 100
9,650
9,312
10,000
122 3 3 122 96.5 122 100
9,650
9,312
10,000
123 3 3 123 96.5 123 100
9,650
9,312
10,000
124 3 3 124 96.5 124 100
9,650
9,312
10,000
125 3 3 125 96.5 125 100
9,650
9,312
10,000
126 3 3 126 96.5 126 100
9,650
9,312
10,000
127 3 4 127 96.5 169 171.5
16,550
9,312
29,412
128 3 4 128 96.5 170 171.5
16,550
9,312
29,412
129 4 2 129 142.5 32 21.5
3,064
20,306
462
130 4 2 130 142.5 33 21.5
3,064
20,306
462
131 4 3 131 142.5 127 100
14,250
20,306
10,000
132 4 3 132 142.5 128 100
14,250
20,306
10,000
133 4 3 133 142.5 129 100
14,250
20,306
10,000
134 4 3 134 142.5 130 100
14,250
20,306
10,000
135 4 3 135 142.5 131 100
14,250
20,306
10,000
136 4 3 136 142.5 132 100
14,250
20,306
10,000
137 4 3 137 142.5 133 100
14,250
20,306
10,000
138 4 3 138 142.5 134 100
14,250
20,306
10,000
139 4 3 139 142.5 135 100
14,250
20,306
10,000
140 4 3 140 142.5 136 100
14,250
20,306
10,000
141 4 3 141 142.5 137 100
14,250
20,306
10,000
142 4 3 142 142.5 138 100
14,250
20,306
10,000
143 4 3 143 142.5 139 100
14,250
20,306
10,000
144 4 3 144 142.5 140 100
14,250
20,306
10,000
145 4 3 145 142.5 141 100
14,250
20,306
10,000
146 4 3 146 142.5 142 100
14,250
20,306
10,000
147 4 3 147 142.5 143 100
14,250
20,306
10,000
148 4 3 148 142.5 144 100
14,250
20,306
10,000
149 4 3 149 142.5 145 100
14,250
20,306
10,000
Credit Card Reward Program in Singapore – The Consumers’ Choice
90
150 4 3 150 142.5 146 100
14,250
20,306
10,000
151 4 3 151 142.5 147 100
14,250
20,306
10,000
152 4 3 152 142.5 148 100
14,250
20,306
10,000
153 4 3 153 142.5 149 100
14,250
20,306
10,000
154 4 4 154 142.5 171 171.5
24,439
20,306
29,412
155 4 4 155 142.5 172 171.5
24,439
20,306
29,412
156 4 4 156 142.5 173 171.5
24,439
20,306
29,412
157 5 2 157 168 34 21.5
3,612
28,224
462
158 5 2 158 168 35 21.5
3,612
28,224
462
159 5 2 159 168 36 21.5
3,612
28,224
462
160 5 3 160 168 150 100
16,800
28,224
10,000
161 5 3 161 168 151 100
16,800
28,224
10,000
162 5 3 162 168 152 100
16,800
28,224
10,000
163 5 3 163 168 153 100
16,800
28,224
10,000
164 5 3 164 168 154 100
16,800
28,224
10,000
165 5 3 165 168 155 100
16,800
28,224
10,000
166 5 3 166 168 156 100
16,800
28,224
10,000
167 5 3 167 168 157 100
16,800
28,224
10,000
168 5 3 168 168 158 100
16,800
28,224
10,000
169 5 3 169 168 159 100
16,800
28,224
10,000
170 5 3 170 168 160 100
16,800
28,224
10,000
171 5 3 171 168 161 100
16,800
28,224
10,000
172 5 3 172 168 162 100
16,800
28,224
10,000
173 5 3 173 168 163 100
16,800
28,224
10,000
174 5 4 174 168 174 171.5
28,812
28,224
29,412
175 5 4 175 168 175 171.5
28,812
28,224
29,412
176 5 4 176 168 176 171.5
28,812
28,224
29,412
177 5 4 177 168 177 171.5
28,812
28,224
29,412
178 5 4 178 168 178 171.5
28,812
28,224
29,412
179 5 4 179 168 179 171.5
28,812
28,224
29,412
Summation
16,110 16,110 1,510,681
1,881,311
1,754,537
Credit Card Reward Program in Singapore – The Consumers’ Choice
91
Tabulated computation between Income Level and Preference for point accumulation
program
Respondents
Income level (X)
Points Preference
(Y) Rank
X A = Rank X (with ties)
Rank Y
B = Rank Y (with
ties) A * B A2 B
2
1 2 1 23 27.5 1 3.5
96
756
12
2 3 1 53 57 2 3.5
200
3,249
12
3 4 1 74 93 3 3.5
326
8,649
12
4 4 1 75 93 4 3.5
326
8,649
12
5 6 1 146 162.5 5 3.5
569
26,406
12
6 6 1 158 162.5 6 3.5
569
26,406
12
7 1 2 1 7.5 7 21.5
161
56
462
8 1 2 9 7.5 8 21.5
161
56
462
9 2 2 15 27.5 9 21.5
591
756
462
10 2 2 24 27.5 10 21.5
591
756
462
11 2 2 25 27.5 11 21.5
591
756
462
12 2 2 26 27.5 12 21.5
591
756
462
13 3 2 41 57 13 21.5
1,226
3,249
462
14 3 2 54 57 14 21.5
1,226
3,249
462
15 3 2 55 57 15 21.5
1,226
3,249
462
16 3 2 56 57 16 21.5
1,226
3,249
462
17 3 2 57 57 17 21.5
1,226
3,249
462
18 3 2 64 57 18 21.5
1,226
3,249
462
19 4 2 76 93 19 21.5
2,000
8,649
462
20 4 2 77 93 20 21.5
2,000
8,649
462
21 4 2 78 93 21 21.5
2,000
8,649
462
22 4 2 79 93 22 21.5
2,000
8,649
462
23 4 2 80 93 23 21.5
2,000
8,649
462
24 4 2 88 93 24 21.5
2,000
8,649
462
25 5 2 113 129 25 21.5
2,774
16,641
462
26 5 2 114 129 26 21.5
2,774
16,641
462
27 5 2 123 129 27 21.5
2,774
16,641
462
Credit Card Reward Program in Singapore – The Consumers’ Choice
92
28 5 2 124 129 28 21.5
2,774
16,641
462
29 5 2 125 129 29 21.5
2,774
16,641
462
30 5 2 134 129 30 21.5
2,774
16,641
462
31 5 2 141 129 31 21.5
2,774
16,641
462
32 5 2 142 129 32 21.5
2,774
16,641
462
33 6 2 147 162.5 33 21.5
3,494
26,406
462
34 6 2 148 162.5 34 21.5
3,494
26,406
462
35 6 2 159 162.5 35 21.5
3,494
26,406
462
36 6 2 173 162.5 36 21.5
3,494
26,406
462
37 1 3 2 7.5 37 100
750
56
10,000
38 1 3 3 7.5 38 100
750
56
10,000
39 1 3 4 7.5 39 100
750
56
10,000
40 1 3 5 7.5 40 100
750
56
10,000
41 1 3 6 7.5 41 100
750
56
10,000
42 1 3 7 7.5 42 100
750
56
10,000
43 1 3 10 7.5 43 100
750
56
10,000
44 1 3 11 7.5 44 100
750
56
10,000
45 1 3 12 7.5 45 100
750
56
10,000
46 1 3 13 7.5 46 100
750
56
10,000
47 2 3 16 27.5 47 100
2,750
756
10,000
48 2 3 17 27.5 48 100
2,750
756
10,000
49 2 3 18 27.5 49 100
2,750
756
10,000
50 2 3 19 27.5 50 100
2,750
756
10,000
51 2 3 20 27.5 51 100
2,750
756
10,000
52 2 3 21 27.5 52 100
2,750
756
10,000
53 2 3 22 27.5 53 100
2,750
756
10,000
54 2 3 27 27.5 54 100
2,750
756
10,000
55 2 3 28 27.5 55 100
2,750
756
10,000
56 2 3 29 27.5 56 100
2,750
756
10,000
57 2 3 30 27.5 57 100
2,750
756
10,000
58 2 3 31 27.5 58 100
2,750
756
10,000
Credit Card Reward Program in Singapore – The Consumers’ Choice
93
59 2 3 32 27.5 59 100
2,750
756
10,000
60 2 3 33 27.5 60 100
2,750
756
10,000
61 2 3 34 27.5 61 100
2,750
756
10,000
62 2 3 35 27.5 62 100
2,750
756
10,000
63 2 3 38 27.5 63 100
2,750
756
10,000
64 2 3 39 27.5 64 100
2,750
756
10,000
65 3 3 42 57 65 100
5,700
3,249
10,000
66 3 3 43 57 66 100
5,700
3,249
10,000
67 3 3 44 57 67 100
5,700
3,249
10,000
68 3 3 45 57 68 100
5,700
3,249
10,000
69 3 3 46 57 69 100
5,700
3,249
10,000
70 3 3 47 57 70 100
5,700
3,249
10,000
71 3 3 48 57 71 100
5,700
3,249
10,000
72 3 3 49 57 72 100
5,700
3,249
10,000
73 3 3 50 57 73 100
5,700
3,249
10,000
74 3 3 51 57 74 100
5,700
3,249
10,000
75 3 3 58 57 75 100
5,700
3,249
10,000
76 3 3 59 57 76 100
5,700
3,249
10,000
77 3 3 60 57 77 100
5,700
3,249
10,000
78 3 3 61 57 78 100
5,700
3,249
10,000
79 3 3 62 57 79 100
5,700
3,249
10,000
80 3 3 63 57 80 100
5,700
3,249
10,000
81 3 3 65 57 81 100
5,700
3,249
10,000
82 3 3 66 57 82 100
5,700
3,249
10,000
83 3 3 67 57 83 100
5,700
3,249
10,000
84 3 3 68 57 84 100
5,700
3,249
10,000
85 3 3 69 57 85 100
5,700
3,249
10,000
86 3 3 70 57 86 100
5,700
3,249
10,000
87 3 3 71 57 87 100
5,700
3,249
10,000
88 3 3 72 57 88 100
5,700
3,249
10,000
89 3 3 73 57 89 100
5,700
3,249
10,000
Credit Card Reward Program in Singapore – The Consumers’ Choice
94
90 4 3 81 93 90 100
9,300
8,649
10,000
91 4 3 82 93 91 100
9,300
8,649
10,000
92 4 3 83 93 92 100
9,300
8,649
10,000
93 4 3 84 93 93 100
9,300
8,649
10,000
94 4 3 85 93 94 100
9,300
8,649
10,000
95 4 3 86 93 95 100
9,300
8,649
10,000
96 4 3 89 93 96 100
9,300
8,649
10,000
97 4 3 90 93 97 100
9,300
8,649
10,000
98 4 3 91 93 98 100
9,300
8,649
10,000
99 4 3 92 93 99 100
9,300
8,649
10,000
100 4 3 93 93 100 100
9,300
8,649
10,000
101 4 3 94 93 101 100
9,300
8,649
10,000
102 4 3 95 93 102 100
9,300
8,649
10,000
103 4 3 96 93 103 100
9,300
8,649
10,000
104 4 3 97 93 104 100
9,300
8,649
10,000
105 4 3 98 93 105 100
9,300
8,649
10,000
106 4 3 99 93 106 100
9,300
8,649
10,000
107 4 3 100 93 107 100
9,300
8,649
10,000
108 4 3 101 93 108 100
9,300
8,649
10,000
109 4 3 102 93 109 100
9,300
8,649
10,000
110 4 3 103 93 110 100
9,300
8,649
10,000
111 4 3 104 93 111 100
9,300
8,649
10,000
112 4 3 105 93 112 100
9,300
8,649
10,000
113 4 3 106 93 113 100
9,300
8,649
10,000
114 4 3 109 93 114 100
9,300
8,649
10,000
115 4 3 110 93 115 100
9,300
8,649
10,000
116 4 3 111 93 116 100
9,300
8,649
10,000
117 5 3 115 129 117 100
12,900
16,641
10,000
118 5 3 116 129 118 100
12,900
16,641
10,000
119 5 3 117 129 119 100
12,900
16,641
10,000
120 5 3 118 129 120 100
12,900
16,641
10,000
Credit Card Reward Program in Singapore – The Consumers’ Choice
95
121 5 3 119 129 121 100
12,900
16,641
10,000
122 5 3 120 129 122 100
12,900
16,641
10,000
123 5 3 126 129 123 100
12,900
16,641
10,000
124 5 3 127 129 124 100
12,900
16,641
10,000
125 5 3 128 129 125 100
12,900
16,641
10,000
126 5 3 129 129 126 100
12,900
16,641
10,000
127 5 3 130 129 127 100
12,900
16,641
10,000
128 5 3 131 129 128 100
12,900
16,641
10,000
129 5 3 132 129 129 100
12,900
16,641
10,000
130 5 3 133 129 130 100
12,900
16,641
10,000
131 5 3 135 129 131 100
12,900
16,641
10,000
132 5 3 136 129 132 100
12,900
16,641
10,000
133 5 3 137 129 133 100
12,900
16,641
10,000
134 5 3 138 129 134 100
12,900
16,641
10,000
135 5 3 139 129 135 100
12,900
16,641
10,000
136 5 3 143 129 136 100
12,900
16,641
10,000
137 6 3 149 162.5 137 100
16,250
26,406
10,000
138 6 3 150 162.5 138 100
16,250
26,406
10,000
139 6 3 151 162.5 139 100
16,250
26,406
10,000
140 6 3 152 162.5 140 100
16,250
26,406
10,000
141 6 3 153 162.5 141 100
16,250
26,406
10,000
142 6 3 154 162.5 142 100
16,250
26,406
10,000
143 6 3 155 162.5 143 100
16,250
26,406
10,000
144 6 3 156 162.5 144 100
16,250
26,406
10,000
145 6 3 157 162.5 145 100
16,250
26,406
10,000
146 6 3 160 162.5 146 100
16,250
26,406
10,000
147 6 3 161 162.5 147 100
16,250
26,406
10,000
148 6 3 162 162.5 148 100
16,250
26,406
10,000
149 6 3 163 162.5 149 100
16,250
26,406
10,000
150 6 3 164 162.5 150 100
16,250
26,406
10,000
151 6 3 165 162.5 151 100
16,250
26,406
10,000
Credit Card Reward Program in Singapore – The Consumers’ Choice
96
152 6 3 166 162.5 152 100
16,250
26,406
10,000
153 6 3 167 162.5 153 100
16,250
26,406
10,000
154 6 3 168 162.5 154 100
16,250
26,406
10,000
155 6 3 169 162.5 155 100
16,250
26,406
10,000
156 6 3 170 162.5 156 100
16,250
26,406
10,000
157 6 3 171 162.5 157 100
16,250
26,406
10,000
158 6 3 172 162.5 158 100
16,250
26,406
10,000
159 6 3 174 162.5 159 100
16,250
26,406
10,000
160 6 3 175 162.5 160 100
16,250
26,406
10,000
161 6 3 176 162.5 161 100
16,250
26,406
10,000
162 6 3 177 162.5 162 100
16,250
26,406
10,000
163 6 3 178 162.5 163 100
16,250
26,406
10,000
164 1 4 8 7.5 164 171.5
1,286
56
29,412
165 1 4 14 7.5 165 171.5
1,286
56
29,412
166 2 4 36 27.5 166 171.5
4,716
756
29,412
167 2 4 37 27.5 167 171.5
4,716
756
29,412
168 2 4 40 27.5 168 171.5
4,716
756
29,412
169 3 4 52 57 169 171.5
9,776
3,249
29,412
170 4 4 87 93 170 171.5
15,950
8,649
29,412
171 4 4 107 93 171 171.5
15,950
8,649
29,412
172 4 4 108 93 172 171.5
15,950
8,649
29,412
173 4 4 112 93 173 171.5
15,950
8,649
29,412
174 5 4 121 129 174 171.5
22,124
16,641
29,412
175 5 4 122 129 175 171.5
22,124
16,641
29,412
176 5 4 140 129 176 171.5
22,124
16,641
29,412
177 5 4 144 129 177 171.5
22,124
16,641
29,412
178 5 4 145 129 178 171.5
22,124
16,641
29,412
179 6 4 179 162.5 179 171.5
27,869
26,406
29,412
Summation
16,110
16,110
1,436,416
1,911,944
1,754,537