Credit Card Reward Programs More Popular Than Retirement Savings (2018 Report)

Putting money away for retirement is one of the most financially prudent moves people can, and should, take. Specialized savings products—like 401(k)s, IRAs and private pensions—can help consumers achieve financial independence once they hit retirement age. Despite that, Americans have a poor track record of actually utilizing these products.

A survey by the Employee Benefit Research Institute showed that 44% of workers are currently not saving for retirement. Instead, data show programs that offer short-term rewards and benefits are more popular. More U.S. households are currently enrolled in credit card rewards programs than retirement savings plans, according to data obtained from Claritas. The difference was far greater in certain cities, like Miami and Los Angeles.

Differences in participation between credit card reward programs and retirement savings offer a window into how some households choose to prioritize short term versus long term financial planning. Credit cards come attached with the risk of debt and have a relatively high barrier to entry. Many rewards cards require users to have good or excellent credit. The points, miles or cash back users collect can be used after just a few months or years of use. Retirement products have no credit requirements, and not nearly as much risk. But individuals must have enough income to comfortably set some of it aside. Unlike credit card rewards, consumers who use retirement products will not reap the benefits for many years—in some cases, decades.

Key Findings

  • 61% of households nationwide are enrolled in at least one credit card rewards program, while just 58% use a retirement savings product.
  • Florida and California fared the worst: 8 out of the 10 worst-performing cities were from these two states.
  • Miami has the lowest retirement savings rate out of the 100 cities we studied. Only 39% of households have a retirement savings plan. However, the city is middle-of-the-pack when it comes to credit card rewards participation.
  • Just 10 cities save more in retirement plans than use credit card rewards: Oklahoma City; Tulsa, Oklahoma; Indianapolis; Plano, Texas; Lincoln, Nebraska; Louisville/Jefferson, Kentucky; Omaha, Nebraska; Fort Wayne, Indiana; Little Rock, Arkansas; and Des Moines, Iowa.

Retirement Savings and Credit Card Rewards Participation by City

Here we highlight the cities with the biggest gap between credit card rewards and retirement savings participation. Nationally, 58% of households have a retirement savings product, while 61% are enrolled in at least one credit card rewards program. Demographic breakdowns by age, race and gender were unavailable, although these are good areas for follow-up studies.

CityCredit Card Rewards Program Participation RateRetirement Product Participation RateDifference in Participation RatesCredit Card Debt
Miami, FL55%39%42%$7,714
Newark, NJ53%42%27%$5,944
Fresno, CA57%48%20%$6,401
Los Angeles, CA63%53%19%$9,161
New York, NY62%52%19%$7,789
Saint Petersburg, FL60%50%19%$6,842
Tampa, FL57%48%18%$7,610
Orlando, FL55%46%18%$7,220
Stockton, CA59%50%18%$6,760
Long Beach, CA65%55%17%$9,320
Jersey City, NJ64%55%17%$8,802
Tucson, AZ55%48%16%$5,293
Buffalo, NY53%46%16%$3,969
Rochester, NY52%45%15%$3,955
Jacksonville, FL58%50%15%$5,589
Oakland, CA68%60%15%$8,347
Anaheim, CA67%59%14%$10,242
Bakersfield, CA64%56%14%$7,899
Mesa, AZ62%55%13%$5,794
Sacramento, CA62%55%13%$7,461
Spokane, WA58%51%12%$7,651
San Francisco, CA74%66%11%$10,273
Glendale, AZ59%53%11%$5,805
Honolulu, HI77%69%11%$5,619
Riverside, CA58%52%11%$7,493
Boston, MA61%55%11%$5,436
Albuquerque, NM60%54%11%$6,213
Irvine, CA73%66%11%$12,219
Chicago, IL60%54%10%$6,103
Phoenix, AZ59%54%10%$6,144
Reno, NV56%51%10%$7,880
Cleveland, OH46%42%10%$3,128
Pittsburgh, PA56%51%10%$4,676
Paradise, NV56%52%9%$5,727
Detroit, MI43%40%9%$3,860
Washington, DC65%60%9%$7,175
Scottsdale, AZ70%64%9%$6,469
San Diego, CA67%62%9%$8,665
El Paso, TX54%50%8%$4,935
Las Vegas, NV60%56%8%$6,250
San Jose, CA70%65%8%$9,322
Philadelphia, PA55%51%8%$5,351
San Antonio, TX55%52%7%$5,140
Henderson, NV66%62%6%$6,721
Lubbock, TX52%49%6%$6,821
Richmond, VA54%51%6%$6,021
Winston-Salem, NC49%47%6%$6,155
Baltimore, MD54%51%6%$6,296
Atlanta, GA56%53%5%$6,722
Houston, TX55%52%5%$5,418
United States Average61%58%5%$6,750
Norfolk, VA54%51%5%$6,063
Greensboro, NC54%51%5%$5,495
Toledo, OH50%48%5%$3,635
Huntsville, AL54%51%5%$6,583
Chandler, AZ68%65%4%$7,877
Dallas, TX52%50%4%$7,627
Wichita, KS60%58%4%$5,988
Tacoma, WA60%58%4%$5,114
Lexington, KY53%51%4%$7,052
St. Louis, MO50%48%4%$5,003
Memphis, TN48%46%4%$4,530
Arlington CDP, VA73%70%4%$8,593
Austin, TX58%56%4%$5,819
Birmingham, AL45%44%3%$3,953
Boise City, ID62%60%3%$6,234
Fort Worth, TX57%55%3%$8,740
Milwaukee, WI52%51%3%$4,395
Anchorage, AK67%66%3%$10,475
Corpus Christi, TX54%53%2%$7,348
Arlington, TX57%56%2%$8,197
Baton Rouge, LA50%48%2%$4,560
Durham, NC55%54%2%$6,093
Colorado Springs, CO63%62%2%$6,615
Portland, OR62%61%2%$6,616
Denver, CO62%61%2%$7,202
Columbus, OH57%56%2%$4,270
Seattle, WA65%64%1%$6,153
Madison, WI62%61%1%$5,501
Kansas City, MO56%55%1%$5,752
Chesapeake, VA65%64%1%$7,407
Cincinnati, OH47%47%1%$5,052
New Orleans, LA48%48%1%$4,672
Charlotte, NC58%58%1%$6,937
Nashville, TN54%54%1%$5,365
Raleigh, NC59%58%1%$6,851
Minneapolis, MN60%60%0%$5,861
St. Paul, MN59%59%0%$5,324
Virginia Beach, VA65%65%0%$7,444
Irving, TX54%53%0%$8,198
Aurora, CO62%62%0%$6,834
Des Moines, IA60%61%-1%$4,757
Little Rock, AR52%53%-1%$4,792
Fort Wayne, IN54%55%-1%$5,522
Omaha, NE60%60%-1%$4,717
Louisville, KY55%56%-1%$5,413
Lincoln, NE57%58%-1%$6,161
Plano, TX65%66%-1%$9,761
Indianapolis, IN53%54%-2%$5,276
Tulsa, OK50%54%-8%$8,147
Oklahoma City, OK53%58%-9%$9,221

Potential Explanations

There's rarely a simple explanation for trends in data like the ones observed above. Too many factors influence retirement savings and credit card rewards participation. For example, Miami has a large immigrant population. It's possible that many immigrant households are sending income back home, rather than putting it away for retirement.

On a national level, here are several factors that may be driving more households to sign up for credit card reward programs.

Advertising and Messaging. Financial institutions pour far more into marketing credit card products than they do for retirement savings. One report by Deloitte showed the industry spent $1.14 billion to advertise retirement products in 2011. At the same time, according to EMI Strategic Marketing, some of the biggest credit card issuers in the U.S.—-Chase, American Express, Citigroup, Bank of America and Capital One—spent more than $1 billion on marketing each.

Credit card rewards are also everywhere you look—on the sides of buses, on television programs and ads, and even in news headlines. They are also far more engaging for readers. Stories of rewards hackers who travel the world for free have wider appeal than a story about a couple who can afford their lifestyle once they hit retirement age.

Credit Card Rewards Provide an Immediate, Tangible Return. When you shop and use a rewards credit card, you earn money immediately. Most of the top cash-back programs can put 1.5% to 2% back into your pocket with each purchase. The benefits of retirement savings are far more intangible. You don't actually see the benefit for many years, which can make it harder to motivate individuals to actually follow through with this type of investment.

As the Deloitte report found, a majority of people "have difficult balancing [...] long-term needs with other, often more immediate financial priorities."

Retirement Accounts Require Users to Temporarily Surrender Income. Most retirement savings products requires individuals to actively contribute some portion of their incomes. On the other hand, credit cards provide passive rewards. That is, so long as you use the right card and pay it off at the end of the month, you're not actually paying to get your rewards.

We should add that, while they have no or little costs associated with them, rewards credit cards do come with risk. The national average credit card debt is growing every day, and it's reached record highs in recent months. While no one should carry a credit card balance month to month, the reality is that many people do.


We obtained data from a report from Claritas Financial CLOUT, a service that surveys consumers to generate geographic insights into financial product demand. We examined the following data points by city:

  • Total number of households.
  • Total number of households enrolled in at least one credit card rewards program.
  • Total number of households with retirement accounts, including 401(k) plans, IRAs, Keogh plans and private pension plans.
  • Average balance per household with Visa, Mastercard, Discover or American Express credit cards on which an outstanding balance can be carried from month to month.

To control for population, we looked at participation as a percentage rather than a total number. Credit card rewards participation was obtained by dividing the total number of households enrolled in at least one credit card rewards program by the total number of households for each city. To get a metric for retirement savings participation, we divided the total number of households with retirement accounts by the total number of households per city.

Here we presented data from the top 100 cities in terms of number of households.


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