Savvy credit card users may boast about their ability to go on lavish trips with credit card travel rewards.
But, in reality, time and energy go into the research and planning of how to maximize these rewards. The typical American doesn’t make the effort.
In an ongoing MyBankTracker survey, the majority of respondents (68.90%) chose cash back as their preferred type of credit card reward. Much fewer respondents (17.15%) selected travel rewards as the preferred credit card reward.
The finding may come as a bit of a surprise given the allure of premium travel rewards credit cards, which have become increasingly popular (and competitive). It shows that most people favor a simple and straightforward credit card reward.
Here are other notable highlights that reveal what people are looking for in a credit card:
- When it comes to credit card rewards, cash back is preferred (68.90%) vs. travel rewards (17.15%)
- Among those looking for a new credit card, the majority of respondents had a specific spending category in mind (54.02%) compared to those who sought a general-purpose credit card (45.98%)
- Nearly 1 in 5 (18.50%) respondents always carry a credit card balance
- 1 in 10 (10.57%) respondents don’t know their credit score
Cash (Back) is King
Credit card rewards can come in many forms, such as cash back, points, and miles.
Cash back is a clear favorite — possibly because it’s simple.
With other types of credit card rewards, there may be complex programs to earn those rewards. Moreover, the redemption of miles and points are not as clear-cut.
Consumers may have trouble discerning the actual value of their rewards redemptions. Or, consumers don’t want to put in the effort to maximize the value of their credit card rewards, which is often the case for travel loyalty rewards.
Dealing With an Ongoing Credit Card Balance
When it comes to credit cards, we always recommend paying off the monthly balance in full.
Otherwise, the interest charges are likely to keep borrowers in debt for a very long time. Additionally, it’s a step backward for credit card customers who earn rewards but then go on to pay interest on their card spending.
For consumers who always carry a credit card balance from month to month, it could be a wise move to consider a balance transfer credit card — ideally, one with an extended 0% APR introductory period on balance transfers and no balance transfer fee.
Without having to pay interest, borrowers can focus on reducing and (eventually) eliminating their high-interest credit card balances.
Easier Than Ever to Check Your Credit Score
An entire industry is built on credit scoring. Many types of credit scores exist and they differ based on their formulas for calculating a number (the credit score) using the data on consumer credit reports.
The majority of lenders rely heavily on FICO credit scores. Typically, there is a fee to obtain one’s FICO score.
Fortunately, more and more lenders and financial companies are offering free credit scores to their existing customers. Some even offer free credit scores to non-customers, too.
Some of these free credit scores are FICO versions while some are not. Regardless, it is increasingly easy to check one’s own credit score for the purposes of knowing one’s general credit risk and monitoring any drastic changes that affect one’s credit profile.
MyBankTracker conducted an ongoing survey regarding credit card preferences during the calendar year of 2018 with 2,032 respondents of ages 18 and up in the United States with a margin of error of +/- 1.96.