How Much In Rewards Have Consumers Collected from Banks?

American Express, Discover and Capital One—some of the largest credit card issuers in the country—spent a combined $12.9 billion on credit card rewards in 2017. This marks a 59% increase over 2011, and it speaks to the increasing rewards war that has been raging among card issuers this decade. However, this is just a small part of the money spent on rewards throughout the industry. Other large issuers, like Citibank and JPMorgan Chase, do not disclose how much they are spending on rewards per year. But in a recent SEC filing, Chase did disclose its total rewards liability—that is, how much its cardmembers have accumulated in rewards and are waiting to redeem. As of 2017, Chase users have a combined worth of $4.9 billion in unredeemed credit card points.

Our analysis also included a look at spending per cardmember. Last year, the banks we examined above spent, on average, $78 per active account. American Express lead the pack, with an annual cardmember spend of $121 per account, while Discover put up just $41 per account. While this shows a positive gain for card users, it is presently unclear whether consumers are being charged more in interest and card fees than they are gaining.

Cities With the Most and Least Credit Card Rewards Participation

Nationally, 69% of households are estimated to participate in at least one credit card rewards program. This can encompass any credit card account that provides a sign-up bonus, ongoing rewards or promotions to its cardholders. Select parts of the country have far more households participating in credit card rewards than others. We examined data for 318 cities across the U.S. where the population was above 100,000. Californians seemed the most rewards-obsessed. For example, more than 70% of households in Fremont, San Mateo and Santa Clarita enrolled in at least one credit card rewards program.

For the most part, cities in southern states like Texas, Florida, Georgia and Mississippi saw lower participation. However, a few northern cities also saw low participation—namely, Detroit along with a few cities in Ohio. Detroit placed last, with just 43% of households using rewards.

We looked at several metrics to determine whether any factors tied these cities together and whether anything could explain the rewards participation, or lack thereof. The biggest correlation was present between rewards participation and median household income. The two had a strong, positive correlation of 0.85. The more affluent a city was, the more likely it is to have a high number of households with rewards cards. Fremont, the city where most households have a at least one rewards card, had the fourth-highest median income on our list.

It should also be noted that high credit card rewards participation correlates to a high level of debt. There was a 0.72 correlation between average credit card debt in a city and its credit card rewards participation rate. However, it should be noted that higher card debt can be a result of many factors, and it isn't necessarily caused by rewards. For example, more affluent cities may spend more in general, which would inflate the total credit card balances for that region.