The Electronic Payments Coalition (EPC) released a new survey on what credit card usage looks like during the holiday season. Conducted by Morning Consult, the poll found that Americans continue to focus on rewards as a reason for choosing their credit card.
According to EPC, Americans are far more likely to choose credit cards that offer rewards programs. Among those who have a credit card, 84% have a card that offers a rewards program. This remains true even among lower-income households, where 75% of those whose household income is under $50,000 have a card with rewards.
The most common reward is cash back, which 66% of cardholders have access to. Half of those surveyed plan to use their cash back to purchase holiday gifts this year.
More than three-quarters of respondents said they plan to use their rewards during this holiday season, whether that’s for gifts, travel, or to accumulate more rewards. For those with household income under $50,000, 76% plan to use their credit card rewards this holiday season.
Considering the Potential Loss of Those Rewards
The backdrop to much of the survey was the Credit Card Competition Act, which some feel would curtail credit card rewards programs. The EPC used the occasion to also ask how consumer habits would change without those rewards programs.
Under a third of respondents who currently receive credit card rewards said that without rewards points, they would travel less this holiday season. Around a quarter said they would spend less on gifts this holiday season without those credit card rewards. Among those whose household income is less than $50,000, 34% said they would travel less, 30% would purchase fewer gifts, and 27% would host friends or family less if they didn’t have credit card rewards.
“The EPC survey shows similar results with Javelin Strategy & Research’s surveys,” said Brian Riley, Director of Credit and a Co-Head of Payments at Javelin Strategy & Research. “People love credit card rewards. In fact, almost three-quarters of credit card programs carry a reward structure.”
“You might find some merchants making noise about who pays for those rewards, but in cases where interchange fell under regulatory control, merchants have failed to keep the promise of lowering prices,” he said. “Credit card rewards stimulate card spending, and in one way or another, they are here to stay.”