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31 Percent of Credit Card Holders Aren't Redeeming Their Rewards

Who doesn't love credit card rewards? Well, according to one new survey, 31 percent of us aren't redeeming them!
A stack of credit cards are shown in this undated photo
Who doesn't love credit card rewards? REUTERS/Jill Kitchener

Who doesn't love credit card rewards, whether they're in the form of points for purchases, air miles, or straight-up cash back? There are few things so satisfying as getting that rebate check in the mail, or using your miles to pay for a flight.

And yet, evidently, not everyone is enjoying the credit card rewards they've earned.

A new survey by found that 31 percent of credit card holders in the U.S have never redeemed their credit card rewards. Say what? People, why aren't you taking advantage of these perks?

Bankrate's survey, which consulted 1,001 adults, didn't find the answer to that question, but Bankrate analyst Robin Saks Frankel suggests that pure ignorance could be to blame.

Wait, I Have Rewards?

"It’s possible that people don’t cash in their rewards because they’ve had the card so long they don’t realize they’ve accrued rewards," said Saks Frankel.

Matt Freeman, head of credit card products at Navy Federal Credit Union, finds that customers redeem more when they receive reminders about their rewards.

"In my experience the more our members are reminded about their card benefits, including their rewards bank, the more they redeem," said Freeman, adding that Navy Federal's cash-back credit card, cashRewards, is its most popular card across all generations.

Related: Shopping for a New Credit Card? Follow These Expert Tips

Bankrate's survey found that boomers were actually more likely to redeem rewards than millennials — but only by one percentage point.

"According to the results of our survey, 38 percent of millennials have cashed in their rewards within the last six months compared with 39 percent of baby boomers. We’re not seeing a large statistical difference between different generations in how they use rewards based on the survey."

Building a Rewards Nest Egg

Why cash in now, when you can wait a few more months or even years to garner enough points to get something you really want? This is the thinking behind some credit card holders.

"Some people save [their points] for years hoping to have enough to finance a major trip or some other fabulous reward they wouldn’t get any other way," said Adam Jusko, founder and CEO at

Aubrey Quinn, an older millennial who works in media relations, can relate to this sentiment. She has two American Express credit cards that offer rewards — one in the form of Delta miles, the other in points that can be accrued from various purchases.

A wife and mother of three, Quinn waits long stretches before redeeming her Delta miles so that when she does, she can "cash out on a big family vacation."

On her other Amex card she's racked up nearly 15,000 reward points, which qualifies her for either a $100 gift card at her choice of a number of retailers or money towards shopping. She's conflicted as to whether she should just take what she can get now, or wait until she's built up more points.

Related: Retailers Are Going High-Tech to Lure in Shoppers

"I find myself thinking, 'If I use the card a few more times, I could get this reward or this trip instead.' When I look at putting them toward gift cards, the dollar amount of the gift card is never significant enough that I’m motivated to redeem them."

Redeeming Can Be a Headache

Redeeming credit card rewards isn't always as simple as it sounds.

"Credit card rewards can be difficult to redeem, depending on the type of reward," asserted Sean McQuay, credit card expert at NerdWallet. "To use travel rewards, [you] need to have a specific trip planned, and, depending on the program, enough points to cover the entire cost. On top of that, you always have the worry that you might get a better point value [using them toward] something else."

Companies Make It Confusing

What's more, credit card companies seem to go out of their way to make rewards systems hard to comprehend for the non-expert. Plus, no two cards are the same.

"Rewards can be very confusing," said Matthew Goldman, credit card expert and founder of Wallaby. "There are many cards that are cash-back only. You typically earn a set amount like 1 percent of all spend or 1.5 percent of all spend back as a rebate. Most cards require you to log in to the bank’s website and redeem that cash back as a credit on your statement, or as a check that is mailed to you. A few banks will allow for automatic redemption. Bank of America, for example, will allow you to automatically redeem cash back from their cards into your BofA checking account. They will even provide a minimum 10 percent bonus on the amount of cash back when you do this."

"There are some cards that earn points that can be used as cash back. For example, Chase Ultimate Rewards points or American Express membership rewards points can be used for cash back (at a value of $0.01 per point) although you can also use these points to book travel or transfer (exchange) these points for miles in various airline programs. The value when you do this is much higher, typically around $0.015 or $0.02 per point. We always recommend using transferrable points for travel versus cash back due to the 50 percent or more higher value."

Huh? Exactly. If you want to keep it as simple as possible, and redeem on a regular basis, opt for a cash-back rewards card.

Cash-Back Is Easiest to Redeem

"Unsurprisingly, cash-back rewards have the highest redemption rate because cash-back is all about simplicity and flexibility — [you] don’t need to have a specific purpose in mind or worry about getting the best value," said McQuay.

What's the best cash-back rewards card? Well, it depends on the type of purchases you make and where you shop, but definitely seek a card that doesn’t charge an annual fee.

"The best cash-back credit cards for most are those without an annual fee that offer flat rewards across all spending categories," said Frankel. "Some of the most user-friendly cash-back cards include the Chase Freedom, the Citi Double Cash Back, Discover it, and the Capital One Quicksilver."

Whatever card you choose (or switch over to), make sure you're focused not on the rewards you want, but on the purchases you already make from which you can actually prosper.

"Pick a card that maximizes rewards on where you spend, not on the type of rewards you want," said McQuay. "For most Americans, even most millennials, that will mean that cash-back cards are the better bet, and honestly, at the end of the day, what’s more useful than cash?"

Not Redeeming Is Fine, So Long as Rewards Don't Expire

If you fall in the 31 percent of credit card holders who aren't redeeming their points, you may have nothing to worry about. But to be on the safe side, read the fine print to be sure your points don't expire.

"I recommend consumers study the rewards program associated with their credit cards and check their rewards bank regularly," said Freeman. "It's okay if they aren't redeeming regularly, as long as their points bank doesn't expire."