Updated: March 19, 2024
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A recent MoneyGeek survey found that while the average credit card user holds 3.6 cards and 86% have some form of rewards or cash back perk, 40% of Americans are not confident they are optimizing their rewards earnings in their daily spending.
The survey also examined how age and credit score impacted reward redemption and how credit card holders plan to utilize rewards in the coming year.
Key Survey Findings:
From airline miles to cash back and dining points, a recent MoneyGeek survey found that American credit card users are leaving money on the table.
63% of survey respondents with credit scores above 740 felt confident in their ability to maximize reward earnings, compared to half of those with credit scores less than 740.
Millennials and Gen Z (18–34) are more likely to time credit card sign-ups with large purchases. Older rewards cardholders are more likely to use different cards to maximize rewards across spending categories.
37% of credit card holders sign up for a new card because of its perks, but 30% of respondents haven’t taken any action to maximize their rewards in the last two years.
Thinking ahead to 2022, 50% more Americans intend to redeem airline miles than in the last 12 months. However, more respondents still expected to redeem rewards via gift cards and merchandise than hotels or airfare.
To learn more about general credit ownership and the behaviors of credit card holders, MoneyGeek surveyed 1,099 people with cash back or rewards cards. This survey population was representative of the gender, age and income demographics of the United States.
Survey results indicated that 7% of Americans had more than 10 cards, while the average for a person with at least one card was 3.6 cards.
Since the start of the COVID-19 pandemic, the economy has seen an overall pay down of average credit card debt. This reality is reflected in new credit card applications: only 40% of Americans surveyed that already had a credit card applied for a new one in the past 12 months.
According to the Consumer Financial Protection Bureau, the average credit card utilization rate has also declined since early 2020. To paint a full picture, the Bureau broke down the data by credit utilization habits. Among those who keep unpaid balances in their accounts, the study saw a decline of 9% in credit card usage.
Brett Holzhauer is a personal finance reporter and credit card user who currently holds four cards. In an interview with MoneyGeek, Holzhauer indicated that — like many Americans — his credit card usage has changed since the pandemic began.
Before the pandemic, Holzhauer maximized his rewards points by using different credit cards for specific purchases.
"Now, I value simplicity more than anything," he said.
MoneyGeek's survey results indicate that 30% of Americans made no effort to maximize their rewards over the last two years.
Although 86% of Americans hold cards that offer rewards or cash back, sophisticated redemption strategies aren’t the norm yet. These techniques are most popular among cardholders with Exceptional, Very Good and Good credit scores. About 63% of survey respondents with credit scores above 740 were confident, compared to 50% among those with credit scores less than 740.
Survey Response | Exceptional (800-850) | Very good (740-799) | Good (670-739) | Fair (580-669) | Poor (300-579) | Unsure | Prefer Not to Say |
|---|---|---|---|---|---|---|---|
Strongly agree | 34.45% | 15.24% | 15.10% | 16.13% | 5.88% | 6.12% | 23.81% |
Agree | 35.37% | 42.22% | 36.73% | 32.26% | 29.41% | 24.49% | 28.57% |
Neither agree nor disagree | 21.65% | 21.90% | 31.43% | 33.87% | 35.29% | 55.10% | 38.10% |
Disagree | 7.01% | 17.14% | 13.06% | 9.68% | 5.88% | 10.20% | 9.52% |
Strongly disagree | 1.52% | 3.49% | 3.67% | 8.06% | 23.53% | 4.08% | 0.00% |
Brett Holzhauer is a sophisticated card user whose purpose is not to borrow money but to maximize his credit card rewards. During his MoneyGeek interview, Hozhauer told us that his favorite rewards cards have transferable points.
"I like to have the control be in my hands, as I am able to transfer [points] where I need them," Holzhauer told MoneyGeek. "If you are earning rewards with one airline or hotel, you leave yourself susceptible to devaluations."
Like overall credit card usage, reward redemptions have also changed since the pandemic began.
Survey results indicate that 37% of cardholders had signed up for a new card because of the rewards offered, but 30% of respondents haven't taken any action to maximize their rewards in the last two years.
COVID-related declines in tourism reduced the appeal of travel rewards, according to the Bureau of Consumer Protection’s Consumer Credit Card Market Report. Our survey supports this assertion, with only 15% of Americans redeeming their airfare rewards in the last 12 months.
On the other hand, according to the Bureau's report, cash rewards represented 55% of the perks cardholders redeemed in 2020. That’s an 11% increase from 2019 and 29% more than in 2016 when only 26% of cardholders chose cash back over other rewards.
As the COVID pandemic advanced, the Consumer Credit Card Market Report shows that issuers turned their attention to general-purpose rewards. These include grocery and home delivery, streaming services discounts and cell phone bill discounts. One in three credit card holders who responded to MoneyGeek’s survey also said they had received rewards in the form of gift cards in the last 12 months.
MoneyGeek's survey revealed that 26% of rewards card holders engaged in sophisticated redemption strategies last year. Examples of these strategies include checking the value of the redemption to see if it’s a good deal or transferring points from one program or another to maximize points. Only 3% indicated they had used both strategies to maximize the value of their redemptions.
Redemption preferences also vary by age, according to MoneyGeek survey results.
Survey result show that younger cardholders (18–34) are more likely to apply for a card based on reward or cashback offers than those older than 35. They’re also more likely to time new card sign-ups with large purchases to maximize introductory rewards. Our survey found that older consumers more often keep a variety of cards at hand and swap them around based on different spending categories to maximize their rewards.
Survey Options | 18-24 | 25-34 | 35-44 | 45-54 | 55-64 | 65+ |
|---|---|---|---|---|---|---|
Applied for a new credit card based on the reward or cashback offers | 62.26% | 61.58% | 53.54% | 50.74% | 44.34% | 35.42% |
Timed a new card sign up with planned large purchases to meet introductory offer spend bonuses | 45.28% | 45.81% | 37.01% | 26.47% | 27.36% | 22.92% |
Added an authorized user to get additional card rewards | 19.81% | 23.65% | 22.05% | 16.91% | 18.87% | 6.25% |
Used different cards to maximize rewards in spending categories (gas, travel, etc.) | 33.02% | 41.38% | 40.94% | 41.91% | 50.94% | 52.08% |
Shopped through your credit card providers' online portal to increase points earned | 24.53% | 33.00% | 33.07% | 38.24% | 35.85% | 22.92% |
Utilized or attempted a manufactured spending tactic | 10.38% | 6.90% | 3.94% | 7.35% | 8.49% | 4.17% |
With a more optimistic sentiment in the general population, credit card holders like Brett Holzhauer expect to use their cards more in 2022. He told MoneyGeek that he plans to use his for expenses such as renovating his home.
As he prepares for 2022, Holzhauer plans to use a number of reward redemption strategies. Some of these include redeeming points for airline travel and hotel stays.
Like Holzhauer, 50% more cardholders said they expect to redeem airline miles next year. Nearly 1 in 5 cardholders intended to redeem points for hotels. However, more Americans still plan to redeem rewards for merchandise and gift cards than they do on airfare and hotels.
MoneyGeek surveyed 1,099 people with cash back or rewards cards representative of gender, age, and income demographics of the United States.
About Lucia Caldera
Lucia Caldera, the founder of Corporate Media Lab, has 10 years of experience in financial planning, management and advising. She writes finance content for MoneyGeek, using her personal finance background to help readers achieve financial wellness.
Lucia holds a master’s degree in international political economy and development from Fordham University and a bachelor’s degree in economics from Clark University. Her work reflects her passion for using financial education to reduce the wealth gap for women and minorities.
