Personal Finance

One-Third of Consumers Say Reward Credit Cards Aren’t Worth the Hassle

When it comes to personal finance experts, the topic of credit cards has been controversial. In one corner you have those like Dave Ramsey who advises followers to stay as far away as possible, citing the high interest rates they carry and the temptation to spend. At the same time there are those who preach about the wonders of rewards and even so-called “travel hacking” used to earn free trips just for buying what you normally would. Given this discrepency it’s really no wonder that a new WalletHub study finds that one-third of consumers don’t think credit rewards are worth the effort.

In terms of why some adults might be negative toward rewards cards, 60% said they spent more at retailers when rewards were on the table. Meanwhile several respondents took issue with some of the rules that certain cards carry. For example 53% cited annual fees and the expiration of certain rewards as their biggest issues with credit cards. Similarly 47% said it was unfair for cards to require that consumers reach a minimum reward balance before they could cash out. Because of this, 60% of those surveyed said they were more likely to ditch their current credit cards than they were to open a new one.

Despite these drawbacks, there are also benefits to select rewards cards as well. Speaking to WalletHub, Duquesne University associate professor of marketing Audrey Guskey first acknowledges consumer frustrations, saying “Because shopping for a credit card is complicated and depends on so many variables, most consumers have no idea what is at stake when selecting a credit card.” However she went on to note that, “The good news for consumers is that the competition is getting more intense among credit card companies, and so consumers can reap the benefits of more rewards and higher points.” Of course she did still warn, “[K]eep in mind not all credit card rewards are the same, and so it really depends on your lifestyle.”

To Guskey’s last point, it’s clear that survey respondents had a preference for what perks a card offered. First of all 58% said they enjoyed flat-rate rewards better than category-specific ones. Nevertheless, asked what bonus categories they found to be the most attractive, the top response was “groceries” with 43%. That was followed by gas (22%), dining (12%), and travel (11%). Incidentally that would also explain why a whopping 74% of respondents stated that they preferred cash back rewards compared to just 11% who liked airline miles.

Ultimately those who admonish credit cards for their tempting nature and confusing rewards do have a point. That said those who preach responsible credit card spending and maximizing rewards also make a compelling case. Overall what’s most important is that consumers choose a path that they’re comfortable with and is most compatible with their financial goals.

Other Articles by Jonathan Dyer