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2015 Study of Credit Card Rewards

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Consumers face a plethora of options when selecting a rewards credit card. These credit cards tend to fall into one of four major groups: hotel, travel, airline, and cash back - each with varying ramifications for consumers.

To help narrow the field of options, we conducted a study of over 100+ credit cards that analyzes the value proposition of all credit card rewards categories to see which type provided consumers with the best value. While these credit cards have rewards structures that operate somewhat differently from one another, we based on our research on direct comparisons through an analysis of rewards rates, bonuses, and annual fees.

Key Study Highlights

  • Hotel affiliated credit cards provide the best rewards for your spending. By category, hotel credit cards have the highest rewards rate even when used on everyday purchases. This is a result of hotel loyalty points having a higher value than airline frequent flyer miles or even cash back programs. Consumers looking to maximize how much they get paid to use a card should look at hotel cards first.

How Credit Cards Compare on Rewards Rates

Rewards rates gave the best point of comparison, by explicitly showing the efficiency of a dollar spent using each credit card – that is, a ratio of the value of what you receive to what you put in.

This graph compares the the amount of rewards rates consumers can earn on their credit card spending across each of the categories.
  • Consumers who spend less than $24,000 are almost always better off signing up for a cash back credit card, over cards in both the airline and travel rewards categories.
  • Airline credit cards provide the worst rewards when it comes to what they can earn on their credit card spending. For most consumers, if an airline card has a rewards rate lower than 2%, a cash back card is almost always the better choice.
  • Travel rewards were in the middle of the pack, just barely outperforming cash back cards. These cards can be good for individuals looking for more inclusive rewards associated with spending. They merge the worlds of Hotel and Airline cards into one credit card. A handful of travel rewards cards offer decent cash back rates on travel-related spending.
  • The worst rate you can receive with a cash back card is 1%. With certain cash back cards, you can receive a flat 2% back on every purchase made. This is a fantastic rate, considering that a majority of cash back cards also come with no annual fee. We use this figure in all analysis to follow, to gauge the performance of airline, hotel, and travel cards.

How Credit Cards Compare on Bonuses

Our study encompassed credit cards with bonuses span the gamut from zero to round-trip international tickets that can be valued at $3,000+ for some of the premium credit cards. The graph below quantifies the mean bonus by each category of rewards credit cards. For a more comprehensive and up to date look at various credit card bonus offers see our Average Credit Card Bonuses study.

This graph shows the mean bonus value across each of the rewards credit card categories
  • Airline cards provided the best bonuses by far out of any other rewards category. This is due to the fact that cards which are affiliated with an airline often provide companion tickets as bonus gifts. These tickets are high-valued items which can be redeemed as a “buy one-get-one free” deal, on an flight. Since airline flights are expensive, the value of these bonuses drives up this category.
  • The most common type of bonus, across all reward categories, is the spending bonus. These work as follows: if a user spends a given amount of money in some limited period of time (usually 1 to 3 months) they will be rewarded with either miles, points or cash. We found that consumers need to spend on average $2,021 to earn these types of bonuses.

How Credit Cards Compare on Annual Fees

  • Despite what consumers may think, paying a higher annual fee for a credit card does not always translate into higher returns. The value in those cards comes from exclusive club memberships, and other perks for individuals. Average spending rewards were a lower than average 1.55% based on general spending, but could range anywhere from an average minimum rewards rate of 0.6% to an average rewards rate of 2.5% when credit card spending is maximized.
  • You need to spend at least $50,400 per year in order for rewards rates on these premium cards to be on par and competitive with other credit cards.

Rewards Rates by Credit Card

One way to get a broad sense of the value held within a credit card is to consider its rewards rate. This rate can be thought of as a measure of spending efficiency. If spending $1 on a card gave back a reward worth $1, we would say the card has a rewards rate of 100% - nothing is lost from spending with it. Unfortunately, rewards rates in practice are more conservative. Few cards offer anything better than a 6% rewards rate, with 1% rewards rate as a standard offer.

In our study, we looked first at simple rewards rates for the various credit card categories, and did not factor in annual fees. The rewards rate is calculated as follows: % Rewards Rate = (Points Earned per Dollar x $ Value of a Single Point) * 100. Below we analyze what kind of rewards rates one can expect out of credit cards in each of the separate rewards categories.

Cash Back Rewards

Cash back cards are unique in that they tend to have the most straightforward rewards and redemption structures. Issuers clearly state what the rewards rates are upfront. Additionally, rewards for these cards are, most of the time, simply applied to your monthly statement, which makes redemption simple. Rewards rates for all other card categories are contingent upon how consumers redeem their rewards points, which can alter the total value of the redemption.

Due to their stable and more predictable nature, cash back cards serve as a good barometer of when a particular line of credit cards is worth the investment. Often, while a travel, airline, or hotel card may offer a discount on a particular brand of products a consumer desires, using a cash back card for the purchase may in fact produce a better net value.

Cash back cards fall into two categories. Flat rate, which are cards that earn you a constant level of cash back, tend to have rewards percentages between 1.25% and 2%. Other cash back cards, including rotating category cards, offer consumers a little more money back (up to 6%). The limitation with those cards is that they offer the higher rates on a few select categories, which often change throughout the year – any spending outside of those categories will generally only reward consumers 1%.

When shopping for credit cards in all different categories, it is always advisable to look at the maximum and minimum rewards rates available to you. If a particular airline, hotel, or travel card you are interested in offers anything less than 1.5% back on general spending, or a specialized category, you should consider going with a cash back card instead. Because cash back cards have no annual fee, they don’t suffer from relying on spending habits to offset the upkeep cost of the cards. We explain this concept in more detail in the ‘Annual Fees’ section below.

Airline Rewards

Airline rewards credit cards are ones which have a partnership or direct affiliation with airlines. Consumers who take part in this type of rewards program see on average the lowest spending rewards. Our analysis found that airline reward points have a mean worth of $0.012. Airline rewards cardholders usually accumulate reward miles at a rate of 1 mile per $1 in general spending categories, and up to 2.5 miles per $1 on specialized categories (which are often purchases with the card’s affiliated airline).

This scatter graph shows the range in rewards rate for various airline credit cards

35% of all airline cards had worse maximum rewards rates than our benchmark cash back cards, which meant that more than one third of the airline-affiliated credit cards had maximum rewards values less than 2%. We recommend that individuals with a strong preference for an airline credit card shop around for the best offer available to them. There is quite a bit of variation between the different cards. Airline credit cards tend to offer rewards rates of 1.67% or lower. 16 of the cards have general spending rewards below 1.5%, which is a baseline rewards rate level with our cash back credit cards; therefore it is prudent to consider cash back options as they may be more rewarding.

Travel Rewards

Airline tickets can be purchased with reward points earned through more than just airline credit cards. With general travel cards, consumers earn points that can be redeemed for broad array of travel related expenses, such as airline tickets and taxi rides. For instance, miles received through the Barclaycard Arrival Plus® World Elite Mastercard® can be redeemed as statement credits on tourist attractions, timeshares, and limousines. In general, travel rewards credit cards tend to offer more ways to redeem your points.

Do more options mean more value? For the most part, yes. Travel Rewards credit cards provide higher value, on average, than airline cards. 29% of all travel cards preformed worse than a 2% flat rate cash back card. The mean rewards rate for a travel credit card is 1.9% - slightly higher than the 1.7% airline cards give. With travel cards, there is also more opportunity to get higher maximum returns on your shopping. The PenFed Premium Travel Rewards Amex card, for instance, can produce a rewards rates of up to 5%. On the other hand, some cards offer the worst rates of all rewards categories, falling to as low as returning just $0.008 on each $1 spent.

This scatter graph shows the range between the minimum and maximum rewards rates that travel credit cards can earn their cardholders

Hotel Rewards

The highest value rewards are generally available through hotel-affiliated credit cards. The mean rewards rate in this category is 2.5% - 0.58 percentage points higher than the second highest rewards category. Hotel rewards cards are far and away the most valuable. In our research into each category, rewards rates were often within 0.26 percentage points of one another. By offering on average over half a cent more on every dollar, hotel rewards credit cards typically far exceeded the mean rewards rates for each of the other credit card types.

Even if a consumer does not want to spend any time comparing cards within a category, his or her odds are better with hotel rewards cards. Only 6% of the cards here performed below our benchmark 2% flat rate credit card value. This means most hotel credit cards will provide you with more value than the average cash back card.

This scatter plot displays the wide range of min and max rewards rates associated with each hotel rewards credit card

Bonuses by Credit Cards

Another key aspect of rewards credit cards is the amount and types of bonuses they offer their holders. Companion tickets, bonus miles, travel stipends, and more all add incremental perks to the overall value that a credit card can offer beyond its base rewards rate. Evaluating cards based on bonuses is nuanced and more complicated than its other features. There is far greater variation and utility between rewards bonuses than in all other comparison points. For the purpose of our analysis, we compared cards by examining the totality of the bonuses they offer. What does that mean? Certain rewards credit cards give bonuses for simply signing up for the card, while others require cardholders to spend a minimum amount of money in a given period of time. Due to the inconsistent and non-standard nature of bonuses, the best comparison can be drawn only by comparing the total bonuses made available, regardless of requirements. With that, keep in mind that some of the bonuses included in the following discussion require spending that may be above the means of some consumers.

Categories with the Best Credit Card Bonuses

Even though they don’t provide consumers with the best rewards rate, airline credit cards offer the best bonus rewards. The average airline travel bonus has a value of $597. The value of airline rewards is amplified by perks such as companion certificates. By being directly affiliated with an airline, some credit cards have the ability to offer “buy one get one free” ticket offers, on select flights. Due to how expensive airfare and tickets can be, these bonus offers drive up the average value of bonuses in this category. Note that in our graphs below, we excluded the British Airways Visa Signature companion ticket, which was valued at over $3,000 for a round-trip flight between New York and London. The data point was an outlier and skewed our graphs. Taking out this one data point did not alter the message of the analysis.

Hotel rewards cards follow in second place, with an average bonus of $393. Similarly to airline credit cards, Hotel Reward cards can offer a fairly expensive product as a perk due to their partnership with hotels. Cards in this category frequently give away free complimentary nights at certain hotels and chains. While not as expensive as an airline ticket, an overnight stay at a hotel can be quite costly and ultimately result in a high bonus value.

Bonuses on travel rewards cards most often come in the form of bonus points, which are then redeemed in the same way normal spending rewards points are. They do not, therefore, get any boost in value or worth. The average value of a travel rewards bonus is $243.

Most cash back cards don’t offer signing bonuses. The few that have this perk typically offer cash for clients who spend a certain amount of money within the first 3 months of service. Not surprisingly, therefore, the median cash back bonus is $0, with the average being a mere $60.

This graph shows the wide range between total bonuses across the different categories of rewards credit cards

Annual Fees by Credit Cards

Our first analysis of rewards rate assumed a simplified view that did not account for annual fees. Even after we factored annual fees into our analysis, the prior conclusions remained the same. The ranking of rewards categories still has the same ordering – with hotel rewards being most profitable, followed by travel and airline. While that analysis is not impacted, incorporating the annual fee into our calculations gives us the ability to further break down which cards can benefit which types of spenders.

Including the annual fee into our consideration changes the rewards rate formula slightly. In order to create a distinction between the rewards rate we discussed earlier, and avoid confusion, we will refer to this value as the Adjusted Rewards Rate (ARR). Adjusted Rewards Rate = (Points Earned per Dollar x $ Value of a Single Point – (Annual Fee/Total Spending)) * 100

The ARR is reliant upon both the annual fee and the amount of money an individual spends. The ARR will also never be higher than the rewards rates discussed earlier in this study. At best, the rewards rate can be equal to the adjusted rewards rate, when there is no annual fee for that particular credit card. Also, because we are dealing with an annual fee, it makes sense to consider annual spending within the context of the above calculation. The higher the spending, the more it offsets the downward impact of an annual fee.

Overview of Annual Fees across Rewards Credit Cards

Airline rewards credit cards were the most expensive, with a median of $80 per year. Unlike all other categories in the study, each airline credit card carried an annual fee. Most airline cards tend to cost on average about $72 a year. There are a few “premium” airline credit cards, however, that are far more expensive. Those few can cost anywhere between $195 and $450 per year, and generally offer more exclusive benefits such as travel credits or airline club membership. These cards generally are not the ones which provide the highest spending rewards rates.

Hotel cards were the second most expensive, with a median annual fee of $67. The most expensive hotel rewards card, and an outlier, the Ritz-Carlton Rewards Credit Card, costs users $395 per year. Unlike what we see in other card categories, this higher annual fee of the Ritz-Carlton Rewards card does correspond with some of the better rewards rates in the category, provided that you are a high spender.

With a median cost of $49, travel rewards cards ranked third most expensive. As with hotel rewards cards, there is a fair amount of variation with the category. A sizeable portion of the travel cards studied charged no annual fee. Some of these no-fee cards can be maximized to obtain good rewards rates, though they tend to only be for niche spending patterns in select bonus categories. For better travel rewards users would have to spend on average $57 per year.

How Do No-Fee Cash Back Credit Cards Compare to Other Rewards Categories?

With a few exceptions, cash back cards come with no annual fee. Given their average rewards, airline and travel credit card owners should be careful when choosing between the categories. On average, cash back cards will provide rewards which are higher than both airline and travel rewards. This is especially true for consumers who spend less than $12,000 per year.

This graph showcases the wide range in values of adjusted rewards rate across the various categories

The above graph summarizes succinctly why looking at spending categories comparatively is important. It shows that cash back cards are generally much better than airline and travel cards, with hotel-branded credit cards as a good contender.

Below consumers can see how rewards fare when it comes to medium ($24k per year) and high ($50k per year) levels of credit card spending.

This graph illustrates how wide the range in adjusted rewards rate can be for different types of credit card categories for someone with about $24,000 of credit card spending a year
Displayed in this graph are the various adjusted rewards rate and their ranges for different types of credit cards for an annual spend of $50,000

Cash back is relatively unaffected by an increase in spending. However, the other categories begin to perform better, value-wise, the more consumers increase their credit card expenditures. Airline cards don’t improve quite as much as the other categories. However, by the time consumers place into the highest spending tier, they will likely be earning all available credit card bonuses and perks, which makes the value of those airline cards significantly higher.


Our research report encompassed 23 airline-affiliated cards, 20 travel rewards cards, 16 hotel-affiliated rewards cards, and 11 cash back cards. For each of the cards, our team of analysts extracted both the minimum and maximum point per $1 spent value. The minimum always corresponded with general spending on all items. The maximum rate was not always broad, and tended to be found in niche spending categories (e.g. in an airline credit card, purchases made with the affiliated airline will net the highest rewards). For this reason, it was important to consider averages as well as the range when comparing the categories instead of solely focusing on the highest returns.

Averages were taken across both minimum and maximums in most of the reward categories, with the exception of cash back cards. For those, we averaged the general spending rate. We thought it unreasonable to factor in the rate of rotating categories into the average, as few consumers will be able to fit their schedule to spend within those periods on those specific items. Additionally, rotating bonuses are capped at varying values, making an average unreliable. Since cash back cards were used mainly as a benchmark, we see this exception to be fair for the general consumer.s

Point value was taken as the average redemption value of a point. For example, the value of an airline mile was derived by taking a sample itinerary, recording its value in $USD, and the price in Frequent Flyer Miles. The two were then divided to obtain a $ / mile value. The same methodology was applied to hotel bookings, and merchandise redeemable by the various points/miles studied.

Comments and Questions

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Info about the following cards: Premier Rewards Gold Card from American Express, Delta Reserve® Credit Card from American Express, Platinum Delta SkyMiles® Credit Card from American Express, Hilton Honors Surpass® Credit Card, American Express® Blue Sky, American Express® Green Card, The Amex EveryDay® Credit Card from American Express, The Amex EveryDay® Preferred Credit Card from American Express, The Plenti® Credit Card from Amex, Blue from American Express®, Platinum Card® from American Express Exclusively for Mercedes-Benz, Bluebird, Centurion® Card from American Express, Hilton Honors American Express Aspire Card, Starwood Preferred Guest® American Express Luxury Card, and Amazon Business American Express Card has been collected independently by ValuePenguin. The issuer did not provide the details, nor is it responsible for their accuracy.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program.

These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned using the card less any associated annual fees. These estimates here are ValuePenguin's alone, not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.

Example of how we calculate the rewards rates: When redeemed for travel through Ultimate Rewards, Chase Sapphire Preferred® Card points are worth $0.0125 each. The card awards 2 points on travel and dining and 1 point on everything else. Therefore, we say the card has a 2.5% rewards rate on dining and travel (2 x $0.0125) and a 1.25% rewards rate on everything else (1 x $0.0125).