How Are Consumers Utilizing Credit Card Rewards During the Pandemic?
bags of money

How Are Consumers Utilizing Credit Card Rewards During the Pandemic?

With the United States economy still suffering at the hands of the COVID-19 pandemic, many consumers have had to grow more savvy in order to weather the storm. According to a recent survey commissioned by the peer to peer payment service PayPal, it seems that, for some Americans, this may include tapping their saved credit card rewards.

First, 29% of survey respondents report turning to their banked credit card rewards to help subsidize their budgets, using them for practical purchases and essentials. Similarly 30% said that their rewards were useful for everyday spending. This figure was even higher for certain purchases including groceries (40%), gift cards (37%), and clothing (34%). However, despite these assertions, 39% of those surveyed said they were unsure about their current rewards balances.

Also notable is that, while shoppers may be utilizing their rewards to help themselves through this crisis, there’s also a desire to support small businesses. In fact 74% of credit card customers surveyed said they’ve been making an effort to shop at small and locally-owned businesses as of late. Additionally 24% stated that they’d choose to use their rewards for a purchase from a small business if their points were on the verge of expiration.

Commenting on the survey’s findings, PayPal’s VP of consumer marketing Jill Cress said, “More and more people across the country are turning to their credit card rewards as a helpful and easy way to make their dollars go further, and in the current environment, two-thirds of Americans now view these rewards balances as a way to buy the things they need such as groceries and other essentials.” She added, “With travel and luxury items still less of a priority for many right now, our research shows that people are instead tapping into their rewards balances to support small businesses in their community and to give back to causes.”

The survey’s results actually correspond perfectly to efforts card issuers have made to support their customers during this time. Some of these promotions include Chase offering bonus categories for grocery purchases as well as offering a statement credit on Instacart Express memberships. Elsewhere, Capital One has forged a partnership with Uber Eats that will give Venture and Savor cardholders 5% back on orders from the delivery service through January next year. Additionally, speaking to consumers’ desire to support small businesses, American Express recently introduced a limited time offer where cardholders can earn a $5 statement credit when they spend more than $10 at an eligible small business. This offer can be used up to 10 times, for a total benefit of $50.

Meanwhile PayPal’s interest in credit card rewards comes as the company continues to expand its Pay with Rewards program. As the name implies, this allows customers with credit cards from a growing list of partners to make PayPal purchases using their rewards points. Unfortunately, the exchange rates for the Pay with Rewards program aren’t always favorable for consumers. For example, Amex Membership Rewards points are valued at 0.6¢ per point whereas The Points Guy suggests that MR points could be worth 2¢ each when used for travel.

Overall, considering the bad reputation that credit card issuers typically carry, it’s interesting to see that some consumers are finding benefit in their rewards during these difficult times. Of course, one aspect of credit card rewards not included in the survey is whether or not these shoppers incurred interest on their purchases — something that could easily erase the perks that come from rewards earned. Therefore, while banked points can certainly come in handy, it’s always worth remembering that credit cards should be used responsibly.

Leave a Reply

The "Email" field is empty, you must enter some text to proceed.The text you entered in the "Email" field appears to be invalid, please edit it and try again
Get the Latest News Delivered to Your Inbox

A Guide to Building Credit and Increasing Your Credit Scores

When it comes to credit, there’s some good news. The average credit score in the United States has been steadily rising in recent years, coming in at 715 in 2023. That may be because, today, consumers not only have more ways to access their credit reports and scores than ever before but also because there are an increasing number of options that Americans have for building credit in the first...

2024 SoFi Checking and Savings Review

Ever since I started taking an interest in the FinTech sector, one company whose name I’ve seen pop up over and over again is SoFi. Lately it seems as though that theme has been sent into overdrive as the company has not only become a household name thanks to its stadium naming rights deal but also because of the company’s continued product expansions. The most interesting development in my mind...
Brim logo

Brim Financial Raises $85 Million as It Eyes Global Expansion

Toronto-based FinTech infrastructure startup Brim Financial has announced a new funding round. About the round: Brim has revealed an $85 million round. The Series C was led by EDC Investments while new investor Vistara Growth and returning investors White Owl Group, Epic Ventures, and Zions Bank also participated. To date, the company has now raised $110 million including a Series B in 2021. According to Brim, the latest funding will...
Chase Freedom Flex card

Chase Reveals Q2 2024 Freedom 5%(+) Bonus Categories

Chase has announced its bonus category picks for the second quarter of 2024 — including some interesting twists. About the categories: As April approaches, Chase has revealed what categories Freedom and Freedom Flex cardholders can earn bonuses on. From April 1st through June 30th, customers can earn 5% (or more) in three categories: Amazon.com, Hotels, and Restaurants. Similar to how Chase embraced a "New Year, New Me" theme last quarter,...
Rent Day

Bilt Announces Home Collection Deal for May 2024 Rent Day

For May's Rent Day, Bilt is offering a deal that will allow members to decrease their rent bill while also adding to their home decor. About the Home Collection offer: Bilt has crafted a unique Rent Day offer for May 2024. Through the 1st, when Bilt members redeem their points toward rent payments, they'll receive the same number of points to be used toward Bilt Home Collection items. To take...