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Rewards credit cards statistics
Cash back reigns as the favored reward across cardholders.
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Rewards are nearly synonymous with credit cards for many cardholders. According to a recent Experian assessment of its CreditMatch data, most consumers looking for a new card browse cashback, no-annual-fee and rewards cards. Among those looking for a rewards card, nearly 80 percent make their final choice based on the type and quality of rewards on a card, according to a TSYS 2018 Consumer Payment Study surveying 1,222 consumers.
To learn just how consumers use these rewards cards and where they fall in the credit card market, Finder analyzed the latest rewards using our own data as well as 2018 data from CFPB, TSYS and Experian.
Purchase volume and rewards cards
We analyzed how much people spent on rewards cards (the purchase volume) across five segments of cardholder credit ratings — superprime, prime, near-prime, subprime and deep subprime — according to a 2019 industry report from the Consumer Finance Protection Board. While the exact number of consumers surveyed isn’t made available, the CFPB pulled this data from nearly ten sources, including internal and publicly available sources.
As you might expect, we found that cardholders in the superprime category made far more of their purchases on rewards cards than other credit ratings, likely thanks to the wide availability of reward cards to this segment. With fewer rewards options available to them, subprime and deep subprime cardholders made nearly half as many purchases on rewards cards with just 58% of cardholders making such purchases.
Purchases on rewards cards by cardholder credit rating
| Credit rating | 2015 | 2016 | 2017 | 2018 |
|---|---|---|---|---|
| Superprime | 85% | 87% | 88% | 90% |
| Prime | 74% | 76% | 78% | 80% |
| Near-prime | 64% | 66% | 68% | 70% |
| Subprime | 58% | 60% | 62% | 64% |
| Deep subprime | 48% | 50% | 55% | 58% |
Source: 2019 CFPB Consumer Credit Card Market Report
Percentage of rewards cards with an annual fee
Since 2015, rewards cards that require an annual fee have increased by two percentage points to 18% of observed rewards cards. While available data is limited, we might expect this number to increase in the years to come as issuers look for ways to balance out the rising costs of card benefits.
Rewards cards with an annual fee
| 2015 | 2018 | |
|---|---|---|
| Percentage of reward cards with an annual fee | 16% | 18% |
Source: 2019 CFPB Consumer Credit Card Market Report
Preferred redemption type
Rewards are popular, but what is the most favorable way to redeem rewards? Cash back is the most popular redemption option, according to the 2018 Consumer Payment Study from Total System Services (TSYS). The company observed data from 1,222 US consumers.
Despite travel’s reputation as a more valuable option for reward redemption, of the observed group just 33% of these cardholders redeemed rewards for travel. This may be because it can take a bit of digging to find out just how much your points for travel are worth. Because people often like to take the road of least resistance, cash back seems to be the smoother path.
Type of rewards cardholders redeemed
| Percentage of eligible cardholders redeeming by type | |
|---|---|
| Cash back | 80% |
| Gift cards | 47% |
| Merchandise | 38% |
| Travel | 33% |
| Experiences | 21% |
Source: 2018 Consumer Payment Study, Total Systems Services
