Credit Card Rewards Aid Consumers and Small Businesses
A new study conducted by Wakefield Research reveals how important credit card rewards are for middle-class Americans
Capital One is on a mission to Change Banking for Good and one way that comes to life is through credit card rewards. Whether in the form of cash back, travel points or other incentives, credit card rewards can provide great value to both consumers and small businesses. For the budget-conscious, credit card rewards can make traveling more affordable. For others, credit card rewards can be used to buy necessities.
Consumers: Rewards for Everyday Expenses and Summer Fun
Many young middle-class Americans are leveraging credit card rewards to stretch their dollars. About 77% of respondents to a recent Wakefield Research survey commissioned by Capital One said that they redeem their rewards to cover essential purchases including groceries and bills, which in turn can help families offset the cost of necessities without sacrificing long-term financial plans. One popular strategy involves cardholders picking up larger restaurant tabs or entertainment tickets and having their friends pay them back, allowing them to earn more rewards.
Parents aged 20-30 years old prioritize cash back to plan for summer activities. The study shows 93% of cardholders in that demographic have had to cut back on summer plans due to financial constraints and are turning to credit card rewards to help bridge this gap.
Travel points are another favorite – whether it’s reduced flight costs to visit family, complimentary meals at airport lounges, or upgraded hotel rooms, rewards miles are helping cardholders get more value out of their trips.
With cardholders going out of their way to maximize rewards, it’s no surprise that rewards offered were a factor for the majority of respondents (98%) when choosing which card to sign up for.
New Small Business Owners: Fueling Growth with Rewards
Like consumers, many small business owners leverage credit card rewards to support their growth. Businesses operating for less than six months are more likely to use credit card rewards to cover day-to-day expenses. This may be due to an early emphasis on growth for brand-new businesses, or it may reflect an increase in day-to-day expenses as companies look ahead beyond their initial launch.
For many new businesses (6-12 months old), rewards are not just a perk but necessary for growth. Nearly half (48%) of these owners consider rewards crucial for growth.
