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

Home » Money Management » Personal Finance » One-Third of Consumers Say Reward Credit Cards Aren’t Worth the Hassle

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.

Comments

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Sales of Small Businesses Dip 5% in 2019

It seems that fewer small businesses changed hands last year than in 2018. According to data from brokers reporting to the business listing site BizBuySell, 9,746 businesses were bought and sold in 2019 compared to 10,312 the year prior. That marks a year over year decrease of 5.5%, snapping a three-year streak...

Varo Money Gains FDIC Approval, Nears Becoming a Real Bank

Over the past few years, several FinTech companies have introduced their own banking services — rolling out savings accounts, debit cards, or both. These products are often the result of partnerships that the startups have with one or multiple banks in order to meet regulatory requirements and provide their customers...

Amazon and Goldman Sachs Reportedly Partnering for Small Business Loans

For any small business to be successful, it needs one thing: capital. While different types of businesses require varying amounts of upfront investment, there are plenty of cases where entrepreneurs need the assistance of small business loans in order get their operations off the ground or take them to the...