Despite a deluge of offers and a bonanza of available rewards, 4 in 10 Americans say they never changed their favorite credit cards, says a CreditCards.com poll
Resisting TV ad blitzes and direct mail touting the benefits of new credit cards, 4 in 10 American credit card holders say they’ve always stuck with the same favorite card or haven’t switched in more than a decade, according to new CreditCards.com poll.The poll results suggest that a surprising number of people are seemingly immune to credit card marketing. But by sticking with the same card long-term, millions of people could be missing out on features of newer cards, such as lower interest rates and more generous rewards including travel perks, airline miles and cash back.
Brian Riley, director of Mercator Advisory Group’s Credit Advisory Service, said industry figures show that about 15 percent of all credit card accounts were opened in the past year. That squares with the CreditCards.com poll, which found that 16 percent of respondents said they switched cards in that time frame. Besides consumer inertia, card companies also try to entice customers to stick with their existing cards, since attracting new customers is expensive.
“It can be hard to craft offers to get people to leave,” Riley says.
The poll surveyed 1,659 adults in the United States who currently are credit card holders (see methodology). They were asked how long it has been since they changed the card they use most often, and what features had attracted them to the card.
The poll found:
- Twelve percent of cardholders said they last switched cards 10 or more years ago, and an additional 28 percent said they had always used the same card. That translates to 49 million Americans who have never switched, and another 20 million who last changed cards 10 or more years ago.
- Younger consumers, those aged 18 to 34, were likely to have changed their go-to card more recently than older counterparts. Compared with those aged 55-plus, millennials were more likely to have switched in the last year (21 to 13 percent) and in the last one to three years (27 to 21 percent). Other recent surveys have shown that the younger generation isn’t shy about applying for different cards in rapid succession.
- Rewards, in the form of points or cash back, were by far the biggest lure for people signing up for a new card, with 27 percent of respondents citing it as the main reason. The other biggest factors were low interest rate (12 percent), “it was easy to get” (9 percent), and card brand (8 percent).
- Cardholders who are older, wealthier and have college degrees are more likely to cite rewards as their favorite card benefit. While 41 percent overall said rewards were their favorite benefit, that figure rises among people ages 55-plus (46 percent), those with a four-year college degree (49 percent), and those who earn $80,000 or more per year (50 percent). Women also favored rewards more than men, 45 to 38 percent.
Leaving rewards on the table
Rewards can be a powerful factor in motivating consumers to apply for new cards and use them. Many of the best travel reward cards offer 50,000 reward points or more after spending a few thousand dollars in the first few months – which can be worth more than $500 or redeemed for two round-trip domestic airline tickets. Most of those cards charge annual fees. Cash-back reward cards typically have no annual fees or sign-up bonuses, and there are several flat-rate cash back cards earning 2 percent.
Experts say there’s no correct number of cards to have or suggested frequency to switch cards. Some people have one card and are content with that. Other people have a dozen or more and regularly scheme to acquire additional cards and the rewards that come with them. The average credit card holder has 3.7 credit cards, according to polling data. It comes down to personal preference.
Where to start
If you have poor credit or are just starting out, sticking with one card and paying it off monthly to improve your credit score is a sensible strategy, says Emily Jablon, co-founder of the travel website Million Mile Secrets. Once your credit score reaches the “good” range at about 700, you might consider dabbling in rewards cards that line up with your rewards preferences, she says.
“You don’t want to come out of the gate and sign up for four or five credit cards,” Jablon says. “First of all, make sure that credit cards are a good fit for you.”
Some consumers fear that switching cards regularly will damage their credit, but those worries are often overblown. While repeated credit inquiries can lower your score by a few points, adding cards also can raise your credit score in the longer term if you manage credit responsibly. Jablon says she has seven cards and a credit score of about 800, which is considered “excellent.”
Methodology: The CreditCards.com poll was an online survey of 2,228 adults in the United States, including 1,659 current credit card holders. It was fielded by the market research firm YouGov. Survey results were weighted to be representative of the U.S. population. It was conducted March 7-8, 2018.