3 in 10 Have Never Redeemed Credit Card Rewards
There is an interesting trend in the card industry that might surprise many of our readers. It has been noted that about three in ten credit cardholders have never redeemed credit card rewards, according to a new Bankrate.com report.
The study found that cardholders are really lopsided in their choice to capitalize on credit card rewards or not. Either frequently collecting rewards points and miles frequently or literally not at all.
“Credit card rewards don’t usually gain value over time,” said Bankrate.com credit card analyst Robin Saks Frankel. “In fact, they’re more likely to lose value as companies require more points or miles for the same perks. Your best move is to cash them in regularly.”
The most claimed reward method is cash back, with 49 percent who have used credit card rewards said they most recently exchanged their rewards points for this purpose. Not too far behind cash back is Airline tickets with 17 percent, then gift cards at 12 percent. The younger generation, from 18-36 were more likely to have selected cash back than older adults.
The preconceived notion has remained that millennials are otherwise averse to credit cards, but this report suggests the opposite. The older millennials, 27-36 years olds, are now more likely than the generation before them to posses a credit card. The Baby Boomers and the Silent Generation are a bit more likely to have a card.
Overall, about 1 in 4 cardholders is willing to pay an annual fee. Millennials are much more receptive than other age groups.
“The credit card market is very competitive right now, so if you’re not happy with a fee, you can either shop around to find another card that doesn’t have one or you can see if the issuer is willing to waive the fee to keep your business,” Frankel added. CreditCards.com recently reported that more than 80% of cardholders were able to get an annual fee waived or reduced just by asking.