Chasing points: How many of us use credit cards just for the rewards?

More than a third (47%) of American adults say they’ve used a credit card solely to rack up rewards points, according to the latest Chasing Points study from Finder, an annual study of roughly 1,800 American adults about their credit card spending habits. That’s about 119.8 million of rewards cardholders, up 38% from the 2019 survey’s 87.1 million who admitted to the same.

Even though more adults are swiping their credit card for the points than last year, they’re spending less on average. Our study found that Americans cardholders charged an average of $1,179.36 each to take advantage of loyalty programs associated with their rewards cards, a decrease of -35% from an average of $1,814.75 last year.

However, while more people than last year appear to be pulling out plastic in the hunt for rewards, the total amount they’re spending is on the way down. Americans spent $141 billion on their credit cards for rewards, which is roughly 11% less than the $158 billion spent in the previous year, the second year in a row of a decrease in rewards spending.

What were people buying?

Finder’s study found that of the nearly $1,179.36 spent by American cardholders looking to earn points on their purchases, they spent the most on groceries on average ($505.01), followed by dining out ($139.48). Flights ($118.99) and hotels ($90.31) come in next, showing that American cardholders are looking for an escape despite COVID-19 restrictions.

• What credit card purchases do you make for the rewards program? – visual
• What credit card purchases do you make for the rewards program? – data

Let’s break it down

Gender

Of our respondents, men both spent more and are more likely to buy with a credit card just for the rewards. Some 51% of men say they’ve paid with plastic for points, and they’re spending an average of $1,291.88 a year on their cards, compared with 43% of women who charge at an average of $1,059.66 a year.

In 9 of 11 spending categories, men are more likely than women to spend money to get points. Women are slightly more likely than men to spend money on groceries and cosmetics/fragrances.

Generation

We all gotta eat. And across generations, groceries are the top purchase for credit card points hunters. It’s also the category in which all generations spend the most.

The generation most committed to racking up loyalty points? Gen X, with 51.18% admitting to using a credit card for points, followed by millennials (49.15%) and Gen Z (47.57%).

However, baby boomers spend the most on average on rewards cards across the board, averaging $1,473.46 per person, followed by the silent gen ($1,683.58) and Gen X ($1,170.49).

Household income

It may not shock you that the more money people have, the more likely they are to spend money on their credit cards to score loyalty rewards. 63.25% of cardholders who earn more than $120,000 say they made a credit card purchase for points, compared to only 31.81% of those making less than $20,000. However, although adults earning $120,000 or over were mostly likely to spend, cardholders with an annual income of $80,000 to $99,999 spent the most on average at $1,583.63.

Are rewards programs worth it?

Rewards cards can offer incredible perks. But whether they’re the right choice depends on your financial needs, spending habits and goals. Weigh the pros and cons of your rewards card, and map out how much you need to spend to reap the biggest rewards.

When looking for a card, carefully read any limits and restrictions on how you can redeem points, and look for eligibility on bonus points at signup. The potential for travel perks, cash back and bonus points could cause you to spend more than normal, potentially resulting in high fees and interest on those purchases.

COVID-19 has changed the way many people have used their credit cards in the past year. As a result, many providers have updated their rewards structure to reflect what people are spending most on during the pandemic (such as more rewards for spending on streaming services and less for travel).

Methodology

Our data is based on an online survey of 1,790 US adults born between 1928 to 2002 commissioned by Finder and conducted by Pureprofile in September 2020. Participants were paid volunteers.

We assume the participants in our survey represent the US population of 254.7 million Americans who are at least 18 years old according to the July 2019 US Census Bureau estimate. This assumption was made at the 95% confidence level with a 2.32% margin of error.

The survey asked respondents whether they have spent on a credit card because of the rewards program and, if so, how much have they spent in the past 12 months.

We define generations by birth year according to the Pew Research Center’s generational guidelines:

• Gen Z — 1997-2002
• Millennials — 1981-1996
• Gen X — 1965-1980
• Baby Boomers — 1946-1964
• The Silent Generation — 1928-1945

Past Chasing Points surveys

• 2019

  More than a third (39%) of cardholders say they’ve used a credit card solely to rack up rewards points, according to the latest Chasing Points study from finder.com, an annual study of roughly 2,100 American adults about their credit card spending habits. That’s about 87.1 million of rewards cardholders, up 21% from last year’s 71.7 million who admitted to the same.

  Our study found that Americans cardholders charged an average of $1,814.75 each to take advantage of loyalty programs associated with their rewards cards.

  However, while more people than last year appear to be pulling out plastic in the hunt for rewards, the amount they’re spending is on the way down. Americans spent $158 billion on their credit cards, which is roughly 10% less than the $175.8 billion spent in the previous year.

  What were people buying?

  Finder’s study found that of the nearly $1,815 spent by American cardholders looking to earn points on their purchases, they most often swiped for groceries (28.1%), followed by dining out (23%) and hotels (16.9%).

  Let’s break it down

  Gender

  Of our respondents, men both spent more and are more likely to buy with a credit card just for the rewards. Some 21% of men say they’ve paid with plastic for points, and they’re spending an average of $1,979.82 a year on their cards, compared with 18% of women who charge at an average of $1,573.63 a year.

  In 10 of 11 spending categories, men are more likely than women to spend money to get points. Women are slightly more likely than men to spend money on cosmetics and fragrances.

  Item	Women %	Men %
  Flights	5.58%	9.74%
  Hotels	6.60%	10.35%
  Groceries	12.73%	15.37%
  Dining out	10.40%	12.58%
  TV/computer purchases	4.31%	7.51%
  Cosmetics and fragrances	5.53%	5.33%
  Household items	7.86%	8.57%
  Literature	2.33%	4.46%
  Music	2.84%	4.82%
  Shoes	6.65%	7.97%
  Other	2.74%	4.67%

  But when chasing points, women outspend their male counterparts in 5 of the 11 spending categories: flights, hotels, household items, cosmetics and fragrances, and other.

  Generation

  We all gotta eat. And across generations, groceries are the top purchase for credit card points hunters. It’s also the category in which all generations spend the most.

  Generation	Likelihood	Amount spent	What they’re most likely to buy
  Millennials	45.94%	$622.52	Groceries
  Gen X	50.06%	$876.37	Groceries
  Baby boomers	42.80%	$531.00	Groceries

  The generation most committed to racking up loyalty points? Millennials, with 35.06% admitting to using a credit card for points, compared to baby boomers (30.27%) and Gen X (23.03%).

  However, Gen X spends the most on rewards cards across the board, averaging $1,750.47 per person, followed by millennials ($1,355.05) and baby boomers ($1,240.69).

  Household income

  It may not shock you that the more money people have, the more likely they are to drop big money on their credit cards to score loyalty rewards. Cardholders who say they earn more than $300,000 a year also say they spend an average of $4,297.95 in an effort to score points.

  Household income	Average spent
  $0 to $24,999	$572.48
  $25,000 to $49,999	$1,123.49
  $50,000 to $74,999	$1,223.72
  $75,000 to $99,999	$1,555.86
  $100,000 to $149,999	$2,082.48
  $150,000 to $299,999	$2,377.72
  $300,000+	$4,297.95

  Are rewards programs worth it?

  Rewards cards can offer incredible perks. But whether they’re the right choice depends on your financial needs, spending habits and goals. Weigh the pros and cons of your rewards card, and map out how much you need to spend to reap the biggest rewards.

  When looking for a card, carefully read any limits and restrictions on how you can redeem points, and look for eligibility on bonus points at signup. The potential for travel perks, cash back and bonus points could cause you to spend more than normal, potentially resulting in high fees and interest on those purchases.

  Methodology

  We analyzed data from a survey of 2,100 US adults commissioned by finder.com and conducted by Pureprofile in February 2019. We did not specify a spending timeframe and therefore count all answers as lifetime spend.

• 2018

  Credit card companies can offer some great rewards: cash back, free trips and discounts, among others. It’s such an attractive offer that an estimated 71.7 million of us – or 29.2% of American adults – have a credit card just because of the loyalty program.

  The average amount people spend chasing points is $2,453.10 per person, which adds up to an estimated $175.8 billion. We’re most likely to be spending this money on clothing and accessories (89.4%), followed by food and drink (88.4%) and then household items (62.0%).

  Let’s break it down

  Gender

  At 30.9% of those surveyed, men are more likely than women to spend money just for a credit card’s rewards program, whereas only 27.6% of women do the same. They also spend almost double that of women, racking up an average $3,021.31 to a woman’s $1,852.87.

  Women are more likely to spend this money on clothing and accessories (95.1%, compared with 84.0% of men) and food and drink (89.4%, compared with 87.3% of men). Men, on the other hand, are more than twice as likely to use their credit cards on tech — 66.7% of men, compared with 31.7% of women. They’re also three times as likely as women (10.6%) to spend on music at 27.7%.

  Generation

  Baby boomers are least likely to buy into this phenomenon. Only 24.3% have used a credit card simply for its rewards, compared with 30.2% of Gen Xers and 36.5% of millennials.

  Unlike with gender, you won’t find a dramatic difference among generations in how much they spend on cards for rewards: Gen Xers splurge the most at $2,942.57 per person, followed by baby boomers ($2,201.37) and millennials ($2,047.18)

  Baby boomers are most likely to spend for rewards on food and drinks and household items. But they’re least likely to spend on clothing — the category in which Gen Xers are most likely to spend.

  Gen Xers are also most likely of the generations to use their cards to spend on tech and electronics, while millennials prefer to buy cosmetics and fragrances, literature and music.

  	Likelihood	Amount spent	What they’re most likely to buy
  Millennials	36.5%	$2,047.18	Cosmetics and fragrances, music, literature
  Gen Xers	30.2%	$2,942.57	Clothing and accessories, shoes, technology and electronics
  Baby boomers	24.3%	$2,201.37	Food and drinks, household items

  Household income

  As for household income, you’ll find no surprises: Those with the highest incomes are more likely to spend on a credit card to take advantage of its rewards program. They’re also spending the most, with those earning a household income of $150,000 or more spending an average $4,601.90 per person.

For all media inquiries, please contact:

Richard Laycock, Insights editor and senior content marketing manager

E: uspr@finder.com

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