Simple Credit Rewards Work for Older Generations, but Not Gen Z

More than 80% of credit card users now receive reward offers from their card issuers and, on average, 72% of those rewards get used within 90 days. Meanwhile, 71% of consumers tell PYMNTS Intelligence that they are highly satisfied with the rewards that their primary card issuers offer them. 

These are just a few data points revealed in our “The Credit Economy: The Role of Reward Programs in Consumer Credit Usage,” a collaboration with i2c that examines the what, why and how card issuers should know as they structure their reward programs going forward.  

Data in the report confirms that, on average, 90% of consumers are interested in earning rewards in exchange for card activity. This is especially true for younger consumers: 94% of millennials and Gen Z consumers say they are especially interested in tallying up reward points in exchange for card usage, but baby boomers and seniors are not far behind, at 90% and 88%, respectively. 

Posing the question: What type of rewards do consumers want to earn? 

The answer: It depends on the consumer. As the figure below illustrates, more than half (54%) of baby boomers and seniors prefer good old-fashioned cash-back rewards on their purchases while 37% are fine with receiving cash rebates on qualifying purchases. 

Younger consumers, particularly those in the ranks of Generation Z, think a little more out of the box when it comes to identifying their wish list of rewards.

For instance, 24% of Gen Z consumers would welcome subscriptions or memberships in exchange for card purchases. Flash sales also appeal to 16% of Gen Z consumers, which is notably higher than the mere 5.4% of older generations who are interested in flash sales. Similarly, approximately 12% of Gen Z shoppers would appreciate ticket access and referral programs while baby boomers and seniors show scant interest in those. 

One reward that offers appeal across all generations of shoppers: free shipping on purchases. One-third of Gen Z and Gen X shoppers say they would select free shipping if it were offered as a reward, but so would 28% of baby boomers, seniors and millennials. And the simple appeal of earning points that can be applied to future purchases resonates with millennials (30%), Gen X consumers (28%) Gen Z shoppers (24%) and baby boomers and seniors. 

These findings underscore both the cross-generational popularity of credit card rewards while at the same time identifying the importance of tailoring reward programs to meet the preferences that are unique to different segments of consumers.