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cash Back Still King: Credit Card Rewards preferences in 2025
New data reveals that despite the rise of travel points and other perks,cash back remains the most desired credit card reward for the majority of Americans in 2025. A recent Bank of America survey highlights this trend, while also showing a divergence in preferences among premium cardholders.
Cash Reigns Supreme for Most Cardholders
According to the survey, which polled roughly 2,000 Americans, 70% indicated that cash back is the most appealing credit card perk. This preference is even stronger among those who don’t pay an annual fee, with 84% favoring cash back. Among cardholders who pay an annual fee under $250, approximately 75% still ranked cash back as their top reward.
Did You Know? According to the U.S. Census Bureau, the median household income in 2023 was $74,580. Cash back rewards can provide a meaningful boost to household budgets.
Premium cardholders Value Points
The survey revealed a different perspective among consumers with premium credit cards (those with annual fees of $250 or more). Only 33% of this group prioritized cash back, while 52% expressed a greater thankfulness for card points, often redeemable for travel or merchandise.
This suggests that higher-spending individuals, who are more likely to hold premium cards, may prioritize the potential value and versatility offered by points programs.
Lifestyle Perks Not a Major Draw
Interestingly, the survey indicated that “lifestyle rewards,” such as early access to concert tickets, exclusive events, airport lounge access, and discounts at specific retailers, were not highly valued by most respondents. This is despite the increasing prevalence of these perks in credit card marketing campaigns.
Pro Tip: When choosing a credit card,carefully consider your spending habits and redemption preferences.Don’t be swayed by flashy perks that you’re unlikely to use.
Annual Fees More Common than expected
The survey also found that approximately 45% of credit card holders reported paying an annual fee of some size.This figure exceeded analysts’ expectations, as the Consumer Financial Protection bureau (CFPB) had previously estimated that only 15% to 27% of credit cards carried an annual fee.
This suggests that consumers may be increasingly willing to pay for credit cards that offer valuable rewards or other benefits.
Demographics of Premium Cardholders
The survey challenged the assumption that premium cardholders are primarily older individuals. In fact, 19% of those surveyed were under 30. The demographic also skewed towards higher-income earners and males, with 65% identifying as male and 35% as female.
What type of credit card rewards do you prefer? Are annual fees worth the benefits?
| Reward Type | Preference (All Cardholders) | Preference (Premium Cardholders) |
|---|---|---|
| Cash Back | 70% | 33% |
| Card Points | N/A | 52% |
| Lifestyle Rewards | Low | Low |
Understanding Credit Card Rewards: An Evergreen Perspective
Credit card rewards programs have evolved considerably over the past few decades. Initially, many cards offered limited or no rewards. However, as competition increased, issuers began introducing incentives to attract and retain customers. Cash back, points, and miles became increasingly popular, and cards began offering a wider range of perks, such as travel insurance, purchase protection, and concierge services.
The value of different rewards programs can vary significantly depending on individual spending habits and redemption preferences. For example, someone who travels frequently may find a travel rewards card more valuable than a cash back card. Conversely, someone who prefers simplicity and predictability may prefer cash back.
Frequently Asked Questions About credit Card Rewards
What are the different types of credit card rewards?
Common credit card rewards include cash back, points, and miles.Some cards also offer statement credits, gift cards, or merchandise.
How do I choose the right credit card rewards program for me?
Consider your spending habits, redemption preferences, and any annual fees associated with the card. Compare different cards and programs to find the best fit for your needs.
Are credit card rewards taxable?
In general, cash back rewards and points earned through spending are not considered taxable income. However, rewards earned through account opening bonuses or referrals may be taxable.
What is the best way to redeem credit card rewards?
The best redemption method depends on your individual preferences and the specific rewards program. Some popular options include cash back, statement credits, travel, and merchandise.
How can I maximize my credit card rewards?
Use your credit card for all eligible purchases, pay your balance in full each month to avoid interest charges, and take advantage of any bonus categories or promotions offered by the card issuer.
Disclaimer: This article provides general information about credit card rewards and should not be considered financial advice. Consult with a qualified financial advisor before making any decisions about credit cards or other financial products.
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