While a reluctance to travel during the coronavirus pandemic may have some consumers wondering what to do with their credit card rewards, others are cashing them in for household essentials like groceries and clothing.
The coronavirus crisis has changed the way consumers shop. Not only are consumers focusing more on day-to-day needs, but economic anxiety has some tightening their spending.
Digital payments company PayPal commissioned a survey of credit cardholders to find out how they’re using their credit card rewards during the coronavirus outbreak. Among the respondents, 44% said they’re more likely to use their rewards during the pandemic, and many are counting on their rewards to stretch their everyday cash.
A pragmatic approach
The pandemic has not soured consumers’ love of rewards. In fact, 27% of respondents said they’re actively trying to collect as many rewards as possible.
However, when it comes to using rewards, consumers aren’t so much focused on their wants as they are their needs. In fact, 29% of respondents said they’re using their rewards to stretch their budgets and 30% said rewards balances are helpful to fulfill day-to-day spending obligations.
Of those who said rewards can help everyday spending:
- 40% cited groceries
- 37% cited gift cards
- 34% cited clothing
Nearly two-thirds of respondents (64%) believe rewards balances are useful as cash.
At the end of April, toilet paper and cleaning products were the commodities respondents were most likely to buy using rewards, with 25% of respondents citing each option. Those items were followed by:
- Drinking water: 22%
- Hygiene products: 20%
Using rewards to make a difference
In addition to using rewards for necessities, some consumers are looking for ways to help their communities. Nearly three-fourths of respondents (74%) said they’ve been intentional about shopping at local small businesses during the pandemic. Looking deeper, 24% said they’d rather spend their rewards with a small business if their points were expiring.
Half of the rewards users may also be philanthropic, as 49% of those enrolled in a credit card rewards program said they’re likely to donate to charitable causes.
But even as some credit cardholders are leveraging their rewards for themselves and others, a sizable percentage may be missing out on an opportunity. According to the survey, more than a third of respondents (39%) said they don’t know their rewards balance. Those respondents risk having their rewards expire before they can take advantage of them.
Consumers should make sure the cards they have offer the types of rewards they’re most interested in. For example, those who plan to spend plenty of cash at the grocery store might want to consider a card that will save them the most money there.
Methodology: On behalf of PayPal, London-based market research firm Atomik Research conducted a survey of 1,543 credit card users enrolled in at least one credit card rewards program. The survey was conducted April 29 and 30.