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CNN Live At Daybreak

Shopping: It's More Than Just Going Broke

Aired November 28, 2003 - 05:16   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


CATHERINE CALLAWAY, CNN ANCHOR: The holiday shopping season officially gets underway this morning. And many consumers are not just looking for bargains, they are also looking for free trips or hotel stays, just by using their credit cards. Here's Ceci Rogers with more.
(BEGIN VIDEOTAPE)

CECI ROGERS, CNNfn CORRESPONDENT (voice-over): From airline tickets to free hotel stays, consumers are hooked on their credit card rewards.

CHARMAYNE BEVERLY, REWARDS CARD CARDHOLDER: I've used United for a free trip to Boston. And actually getting ready to use another one to go to Jamaica.

ROGERS: Card users have come up with some twists of their own; Paul Kiepura, used Diners' Club points to pay his son Michael's college tuition as part of a personalized rewards program.

PAUL KIEPURA, DINERS CLUB CARDHOLDER: Every month that statement comes and you see the points amassing. And you keep thinking to yourself, I'm going to use these someday, but I don't know for what.

ROGERS: The latest splash is the Duetto (ph) VisaCard, for every dollar spent, BankOne will contribute one cent to a pre-paid Starbucks account. BankOne has partnered with nearly 1,000 companies including Disney and Volkswagen to entice new customers.

TIM O'DONNELL, SENIOR V.P., BANKINE CARD SERVICES: We see a real fundamental shift in how people are using their cards. In the last four years the number of people who have a rewards based card is more than doubled and that is a great, significant change, given the number of cards that are in the marketplace.

ROGERS: Purchases on credit and debit cards were up nearly 10 percent last year. They are projected to rise another 8 percent this year, for the first time surpassing $2 trillion.

MARK SACHER, AURIEMMA CONSULTING GROUP: The rewards cards are great way to drive growth because they are incenting behavior, so they actually change the consumer's behavior and generate a lot more spending volume. In that regard they are quite successful.

ROGERS: Just ask Loretta Wongstrum. She looks for ways to use her credit cards to earn free flights. LORETTA WONGSTRUM, REWARDS PROGRAM PARTICIPANT: Groceries, gas, cars, automobiles -- everything we can.

ROGERS: But credit analysts warn that consumers need to be careful about the fine print on reward cards. Some carry no annual fee, but others, especially airline cards, charge as much as $50 a year. Reward cards are more competitive these days on the rates they charge, but those charges can quickly wipe out the rewards.

(on camera): Increasingly, reward cards are becoming a way of life for many consumers. Experts say they're a good deal as long as consumers don't spend more than they would have otherwise and they pay off their balances every month.

Ceci Rogers, CNN Finanical News, Chicago.

(END VIDEOTAPE)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com






Aired November 28, 2003 - 05:16   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CATHERINE CALLAWAY, CNN ANCHOR: The holiday shopping season officially gets underway this morning. And many consumers are not just looking for bargains, they are also looking for free trips or hotel stays, just by using their credit cards. Here's Ceci Rogers with more.
(BEGIN VIDEOTAPE)

CECI ROGERS, CNNfn CORRESPONDENT (voice-over): From airline tickets to free hotel stays, consumers are hooked on their credit card rewards.

CHARMAYNE BEVERLY, REWARDS CARD CARDHOLDER: I've used United for a free trip to Boston. And actually getting ready to use another one to go to Jamaica.

ROGERS: Card users have come up with some twists of their own; Paul Kiepura, used Diners' Club points to pay his son Michael's college tuition as part of a personalized rewards program.

PAUL KIEPURA, DINERS CLUB CARDHOLDER: Every month that statement comes and you see the points amassing. And you keep thinking to yourself, I'm going to use these someday, but I don't know for what.

ROGERS: The latest splash is the Duetto (ph) VisaCard, for every dollar spent, BankOne will contribute one cent to a pre-paid Starbucks account. BankOne has partnered with nearly 1,000 companies including Disney and Volkswagen to entice new customers.

TIM O'DONNELL, SENIOR V.P., BANKINE CARD SERVICES: We see a real fundamental shift in how people are using their cards. In the last four years the number of people who have a rewards based card is more than doubled and that is a great, significant change, given the number of cards that are in the marketplace.

ROGERS: Purchases on credit and debit cards were up nearly 10 percent last year. They are projected to rise another 8 percent this year, for the first time surpassing $2 trillion.

MARK SACHER, AURIEMMA CONSULTING GROUP: The rewards cards are great way to drive growth because they are incenting behavior, so they actually change the consumer's behavior and generate a lot more spending volume. In that regard they are quite successful.

ROGERS: Just ask Loretta Wongstrum. She looks for ways to use her credit cards to earn free flights. LORETTA WONGSTRUM, REWARDS PROGRAM PARTICIPANT: Groceries, gas, cars, automobiles -- everything we can.

ROGERS: But credit analysts warn that consumers need to be careful about the fine print on reward cards. Some carry no annual fee, but others, especially airline cards, charge as much as $50 a year. Reward cards are more competitive these days on the rates they charge, but those charges can quickly wipe out the rewards.

(on camera): Increasingly, reward cards are becoming a way of life for many consumers. Experts say they're a good deal as long as consumers don't spend more than they would have otherwise and they pay off their balances every month.

Ceci Rogers, CNN Finanical News, Chicago.

(END VIDEOTAPE)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com