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New Data Reveals Credit Card Rewards Program Popularity Remains High As Consumers Cite Value & Easy Redemption

May 16, 2016

Phoenix Report examines credit card rewards program trends across age, income and education segments

New data from Phoenix Marketing International examining consumer usage and attitudes toward credit card rewards programs shows that 87 percent of credit cardholders have at least one rewards card while an overwhelming 96 percent say they derive value from these programs, with 67 percent considering their rewards “very valuable.”

Surveying more than 3,000 credit cardholders across age ranges, income brackets and education levels, the new report provides insight into how credit card rewards programs are being used and why. According to the data, 93 percent of all credit card spending occurs on rewards cards, up from 88 percent in 2013. The report also examines consumers’ understanding of their rewards programs, finding that 74 percent understand rewards and how to redeem them, with the vast majority – 73 percent – saying they’ve redeemed rewards in the past year.

“Rewards credit cards are deeply woven into the fabric of today’s credit card market, with people from nearly every segment of American society using them,” said Greg Weed, Director of Card Performance Research at Phoenix. “These cards contribute the lion’s share of credit card market spending, transactions and revolving balances. Underlying the strength of the rewards credit card market is the clear sense of consumer confidence in the programs – as measured by program comprehension, ability to reap the benefits of the programs and the general sense that they derive value every time they use a rewards card.”

The data also provides insight into who is benefitting from card rewards. While prevailing popular perception is that consumers in upper income brackets benefit most from rewards cards, the data reveals that a majority of cardholders in the lowest income bracket (<$20K per year) own a rewards credit card and derive value from using the card. Highlights of the data related to various population segments include:

  • Nearly three-fourths (73 percent) of individuals in the lowest income bracket said they own a rewards credit card and 96% of this group found value in using the cards.
  • Eighty-six percent of Millennials owning a credit card have a rewards card – and they are reaping the benefits. Forty-three percent of millennials, more than any other generation, have redeemed their rewards in the past month; that compares to 32 percent of all rewards cardholders.
  • People with varying levels of education report owning a rewards credit card. Seventy- eight percent of people who didn’t attend college said they own a rewards card and 96% of this group found value in using these cards. That compares to the 90 percent of people with a college degree who said they have rewards card – 97% found value in using a rewards credit card.

These findings are part of a Phoenix report titled ‘Rewards Credit Cards, Redemption and Merchant Loyalty Programs’ – published as part of a 14-year credit card market tracker called Credit Card Monitor. The data for this report was collected in March 2016 among 3,003 respondents owning a general-purpose credit or charge card for personal use.

Click here to view an excerpt from the Rewards Credit Cards, Redemption and Merchant Loyalty Programs report.

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