In an online survey conducted in April and commissioned by PayPal, respondents said they are using their credit card rewards for essentials like groceries and toilet paper. Forty-four percent of those surveyed said they are more inclined to use their rewards during the coronavirus.
As retailers nationwide can attest, consumers are far from enthralled by fashion as a result of the pandemic shutdown and stay-at-home orders. Twenty-nine percent of the survey respondents said they are using their rewards balances to stretch their budgets and buy essentials. And for essentials, 25 percent said they planned to spend it on toilet paper and cleaning products.
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“More and more people across the country are using 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 view these reward balances as a way to buy things they need such as groceries and other essentials,” said PayPal’s vice president of consumer marketing.
Credit cards are a must for the majority of the estimated 253 million adults in the U.S. More than 75 percent of Americans have at least one credit card, according to the Federal Reserve Bank of Atlanta. The number of adult cardholders in the states is expected to increase to 191 million by 2022 — a 6 percent increase compared to 2017, according to a U.S. Census Bureau and Nielsen report.
Apparently, many cardholders — 43 percent of the survey’s respondents — who are enrolled in credit card rewards programs rarely or never considered spending their rewards points to make a purchase, according to the PayPal-commissioned research. The average credit card balance of American households is $5,700, based on data from the Survey of Consumer Finances by the U.S. Federal Reserve.
This spring’s research showed that respondents are leaning toward the pragmatic. Participants said they are using rewards for everyday spending with 40 percent using rewards for groceries, 37 percent using them for gift cards, 34 percent putting them toward clothing purchases and 25 percent are cashing in rewards for toilet paper.
Seventy-four percent of respondents said they have made a conscious effort to shop locally — that is evidence of what has become more of an intercontinental consumer trend, due to the financial impact on local businesses due to the coronavirus shutdown. Acknowledging that travel and luxury purchases are still less of a priority for many, Cress said the recent research showed people are tapping into their rewards balances to support small businesses in their communities and to give back to causes.
More industrious credit card rewards members — 27 percent — are actively trying to collect as many rewards points as possible. The survey showed that more than 66 percent of respondents reported they can donate credit card rewards and travel miles to charity. PayPal has expanded its Pay With Rewards feature to allow customers to donate their credit card rewards to support charitable causes through its Giving Fund, which includes COVID-19 relief efforts. The Pay With Rewards program can also be used to shop online using eligible credit card rewards with millions of businesses.