NEW YORK CITY–Nearly one-in-three adults uses their credit card solely for the loyalty program benefits the purchases earn, according to a new survey.
The survey, called “Chasing Points” and conducted by Finder.com, said the estimated 71.7-million American adults who say it’s all about the reward spend an average of $2,453.10 per person on such purchases, totaling to an estimated $175.8 billion. The research, which can be found here, also shows how this cohort of cardholders differs by age and gender, and where they spend their money.
“While the credit card industry didn’t invent loyalty programs, theirs have certainly been amongst the most successful with consumers,” said consumer advocate Jennifer McDermott in a statement accompanying release of the research. “The points system, which can be exchanged for cash, travel miles and other items has really tapped into a unique psychology of spending; one that makes us feel like we’re winning when really, we’re just spending more. While the system can certainly be played to our advantage, the addictive gamification of these programs can lead to disastrous, debt-related ramifications for those who get carried away.”
Among the findings:
Gender
- · Men are more likely than women to spend money for just a credit card rewards program (30.9%), spending almost double than women, on average $3,021.31
- · Whereas women are less likely than men to spend money for just a credit cards rewards program (27.6%) and spend almost half what mean spend, on average $1,852.87
Spend by Gender
- · Women are more likely to spend on clothing and accessories (95.1% compared to 84.0% of men)
- · Women are more likely to spend on food and drink (89.4%, compared to 87.3% of men)
- · Men are twice as likely to use their credit cards on tech (66.7%, compared to 31.7% of women)
- · Men are three times as likely to spend on music (27.7%, compared to 10.6% of women)
Generation
- · Only 24.3% of Baby Boomers spend money just for a credit card rewards program, compared to 30.2% of Gen Xers and 36.5% of Millennials
- · 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 and least likely to spend on clothing
- · Gen Xers are most likely to spend on clothing, tech and electronics
- · Millennials are most likely to spend on cosmetics and fragrances, literature and music
Type of Credit Card Purchases
- · Clothing / Accessories: 89.4%
- · Cosmetics / Fragrances: 27.9%
- · Food / Drink: 88.4%
- · Household Items: 62%
- · Literature: 10.1%
- · Music: 19.3%
- · Shoes: 47.6%
- · Technology / Electronics: 49.7%
The survey also found, not surprisingly, 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.