Home » Studies » People Are Going Into Debt for Rewards Points and Miles: Survey

People Are Going Into Debt for Rewards Points and Miles: Survey

People Are Going Into Debt for Rewards Points and Miles: Survey

*Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.

This article was last updated Jun 27, 2018. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.

A recent survey revealed that nearly 40% of people with rewards credit cards also carry debt on those cards, negating some or all the benefits rewards cards provide. On average, the balance is often nearly enough to swamp any benefit the cardholder might receive rewards-wise from the card.

CompareCards.com surveyed 1,051 Americans with at least one rewards credit card and asked them about their card preferences, how much they value they get from their points or miles and if they currently have a balance on those cards.

39% of rewards cardholders carry a balance

You might think that with rewards cards, people would keep revolving balances low, if not zero. After all, they tend to have somewhat higher APRs than cards that don’t offer rewards, so any interest you pay on the credit card balance makes rewards cards, well, less rewarding.

U:UsersChris HorymskiDesktopOneDrive - LendingTreerewards for debt surveyGraph-4.png

Among those who don’t pay their rewards cards in full, the average balance they reported across all their rewards credit cards was $2,547. Even presuming that they have cards with a relatively low APR of 15.9%, that still amounts to $378 in interest payments every year. That’s the equivalent of 37,800 miles’ worth of rewards, assuming 100 miles have a redemption value of $1. Earning 37,800 miles would require a significant amount of spending — $18,900 on a card that earns two miles per dollar — and if you’re already carrying a balance, $18,900 of purchases throughout the year will likely add to that. In short, using rewards to retire debt is a losing proposition at these levels. And according to our survey, the most common use of rewards is, ironically, to retire debt.

Paying off debt the top use of rewards

About a third (32%) of rewards card users — both those with and without rewards card debt — said the top thing they planned to use their rewards for was to pay down debt. While some of those respondents could be using rewards to pay down debt like student loans, it’s likely that many of them are going the inefficient route of redeeming rewards they earned by spending more than they could afford in the first place.

An equally utilitarian reason, savings was the second most chosen item, with 21% saying that’s how they planned to use their rewards. A decent share of cardholders redeem their rewards for travel (17%), while fewer people favored using rewards for goodies like gifts (12%) and clothing (5%).  

U:UsersChris HorymskiDesktopOneDrive - LendingTreerewards for debt surveyGraph-5.png

Obviously, rewards card spending isn’t a realistic solution to pare down significant credit card debt. Many rewards chasers might be better off in the short term by temporarily shelving the rewards cards in favor of either a personal loan with lower interest rates, or by applying for a balance transfer card, which offers low or 0% introductory APR financing for 6 to 18 months.

What is a mile worth, anyway?

We also asked reward card users about the value of the points or miles they receive. If they had more than one rewards card, we asked them about the points value on their favorite card.

More rewards cards users said they believe their points are worth more than one cent per point: 38% said that 10,000 points on their favorite card have a value of more than $100, while 36% said 10,000 points are worth exactly one cent per point. The remaining 25% said their points have a value of less than one cent per point.

U:UsersChris HorymskiDesktopOneDrive - LendingTreerewards for debt surveyGraph-2.png

It’s not just that people who say their points are worth more have cards with a better rewards redemption rate.  They may, in fact, get more bang for their buck — it depends how they redeem their points or miles. For example: Say a credit card allows you to redeem 50,000 points for $500 in cash back, but the same card gives 50,000 points a redemption value of $625 when used for travel. Someone who uses those points for travel gets much more value for their points than someone with the same card who uses them for cash back.  

We also noticed that users who valued their miles at “par” (1 point = 1 cent) tended to have more of them. On average, they reported having nearly 92,800 miles over 30,000 miles more than those who valued their points being worth more than par, and over 40,000 miles than those who valued their points less than par (though it’s possible that those who value points at more or less than one point simply use points more frequently).

You have how many cards?

Most reward card users in our survey only had one or two of them. However, more than a quarter reported having three or more rewards cards.

U:UsersChris HorymskiDesktopOneDrive - LendingTreerewards for debt surveyGraph-1.png

Having more than two rewards-based credit cards isn’t necessarily a problem. For example, some or all the cards in these wallets may have different functions, such as offering cash back or collecting miles on different airline carriers. Also, some of the cards may have transferable points or miles, making them more versatile. On the other hand, concentrating all your rewards on one or two cards may allow you to accumulate points or miles faster than if the rewards were spread out among multiple cards, and in the case of travel rewards cards, keep annual fees to a minimum.

Keeping tabs on rewards

Most people track their money more often than their miles. However, a considerable number of cardholders check their miles gauge more often.

U:UsersChris HorymskiDesktopOneDrive - LendingTreerewards for debt surveyGraph-3.png

About one in five rewards card users we surveyed say they mind their miles more than their checkbooks. Considering the proliferation of blogs and websites devoted to “miles runs,”“status runs” and collecting miles over the years, we shouldn’t be surprised.


CompareCards by LendingTree commissioned Qualtrics to conduct an online survey of 1,051 Americans with at least one rewards credit card, and asked questions about their rewards card usage and what they prioritize when using their cards. The survey was fielded Feb. 27-28, 2018.

Recommended Posts:

Read More

13% of Millennials are Debt-Free, Credit Card Debt Most Common Problem

When the words “debt” and “millennial” are written in the same sentence, it usually has to do with the nation’s trillion-dollar student loan debt crisis. But a recent CompareCards survey found that student loan debt isn’t the most common debt weighing down millennials: It’s credit card debt. Sixty-seven percent of millennials report having credit card […]

Read More