This Many Americans Are Missing Out on Credit Card Rewards. Don't Be One of Them
Many Americans use rewards credit cards -- but around 29% of consumers do not. See why they're missing out and why you may want to get a rewards credit card.
Image source: Getty Images
Many people use credit cards to pay for everyday purchases, but only some consumers earn rewards when they swipe their credit cards. Using a rewards credit card is an easy way to earn points, miles, or cash back when you use your card for everyday essentials and expenses.
Find out how many Americans are not earning rewards with their cards and discover why you may want to start using rewards credit cards as part of your financial strategy.
Featured offer: save money while you pay off debt with one of these top-rated balance transfer credit cards
74% of Americans have credit cards that earn rewards
A recent The Motley Fool Ascent study examined Americans' generational credit card usage habits. How consumers use rewards credit cards and what features they look for vary by generation.
For example, a top feature that baby boomers look for is cards with no annual fee. In contrast, most millennials focus more on credit cards with low interest rates. However, reward credit card usage is prevalent across all generations.
According to the study findings, 74% of all respondents use rewards credit cards. Based on this statistic, 26% of Americans aren't earning credit card rewards. Other studies show a similar trend regarding rewards credit card usage.
A 2022 Wells Fargo study found that 71% of Americans have a credit card that earns rewards. The study also found that nearly half (49%) of rewards cardholders are using credit card rewards to offset some of the costs of everyday purchases now that goods and services are more expensive.
Why more consumers should consider using rewards credit cards
Consumers who don't have credit cards that provide rewards are missing out. It's easy to earn rewards just by swiping your cards like usual. Many no annual fee credit cards offer rewards, and there are plenty of rewards cards with affordable annual fees of under $100.
No matter what kind of card you use, remember that carrying a balance is not recommended. The best strategy is to swipe your card for everyday purchases and pay your entire statement balance off monthly to avoid expensive credit card interest fees. Don't risk accumulating credit card debt, which could negatively impact your finances.
Earning rewards for everyday purchases is a win for your personal finances because it requires little effort. Many of these cards also include valuable benefits like purchase protection and extended warranties, giving you another reason to add a rewards credit card to your wallet.
How to choose the right reward credit card for you
Are you considering a credit card that offers rewards? Make sure you get one that fits your needs. You should review your finances to decide if now is the right time to apply for a new credit card. You'll also want to determine whether you can afford an annual fee. If not, you should explore no annual fee cards.
It's also wise to consider your top spending categories. Choosing a card that rewards purchases that align with your typical spending habits can help you earn more rewards faster. If your spending habits vary, a flat-rate rewards card may be best.
Finally, research your rewards redemption options. Do you want to earn rewards you can redeem for travel, or are you looking for a simple cash back credit card? Some credit card issuers have more flexible rewards programs, so explore various programs before applying for a card.
Want to learn more? Check out our list of the best rewards credit cards.
Alert: our top-rated cash back card now has 0% intro APR until 2025
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.
