Survey Finds Americans Save Average of $757 with Credit Card Rewards
Love them or hate them, the use of credit cards is on the rise. Additionally, despite this form of payment often being associated with debt, it seems as though a number of consumers are using plastic (or metal) to their benefit. In fact, according to a new survey commissioned by SlickDeals, Americans save an average of $757 per year thanks to credit card rewards.
In terms of how many credit cards consumers are carrying, the average number was three. Given this limited number of slots, respondents reported spending an average of six hours researching potential options before applying for a new card. Interestingly, only 74% of those surveyed say they meet the minimum spending required to earn welcome bonuses — which are one of the key ways that consumers gain value from new credit card accounts.
Speaking to the value of the rewards they earned from credit cards, 55% of those surveyed said they’ve been able to “almost entirely” cover the cost of a vacation using rewards. Meanwhile, 53% stated that their credit card benefits have allowed them to enjoy a first-time experience. Among these experiences were fancy dinners (54%) and concerts (49%).
Asked what they used their credit cards for, the most popular answers among respondents were “everyday purchases” and “large purchases” with 52%. This was followed by “travel” with 47%. Restaurant dining (45%) and vacations (43%) rounded out the list.
Commenting on the survey’s results, Slickdeal Senior Personal Finance Editor Louie Patterson said, “Credit cards aren’t just another way to pay for your purchases. If you choose the right rewards cards and you’re strategic about how you use them, you can earn tremendous benefits such as free flights, hotel stays or even cashback.” Patterson went on to offer some advice to consumers, adding, “Once you’ve done the research on the right rewards card for you, there are a number of ways to maximize the benefits. Make sure you pay off the balance in full, look for opportunities to pay with your card for monthly fees such as insurance, cable and cell phone bills, and be on the lookout for opportunities to earn bonus points, which may be awarded for specific types of purchases.”
Despite the assertion that credit card rewards are an overall benefit, there are those who have been critical of the practice on a few different fronts. First, some argue that credit cards only entice consumers to buy more (or carry a balance and pay interest), thus negating the value of any rewards they might earn. Zooming out further, businesses may need to pay larger processing fees for rewards credit cards than they would with a debit or non-premium credit cards. In turn, retailers could be raising their prices to account for this, which could particularly impact cash customers who are paying just as much without getting the “perks.” Of course, there are no easy solutions to the issues.
Ultimately, when used responsibly, there are several credit card options that can be beneficial to everyday consumers. Whether they prefer cashback or points that can be redeemed for travel, the ability to earn rewards on items they were going to buy anyway is certainly attractive. Meanwhile, a number of FinTechs are working to bring these types of perks to alternative credit card and debit card products to help level the playing field. Could this eventually help the $757 figure grow? We’ll have to wait and see.