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Credit card rewards use by generation: Who’s doing the better job?


The degree to which cardholders successfully use credit card rewards varies considerably by generation – and not necessarily in ways we may expect.

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Every generation has something to teach other generations, as well as things they could learn from consumers born in other time periods. The same truth applies to credit card rewards.

The degree to which cardholders successfully use credit card rewards varies considerably by generation – and not necessarily in ways we may expect.

For example, millennials and younger have apps for everything, and have vast social networks with which they share experiences and recommendations all day, every day. It would only follow that since younger generations are online all the time, they would be on top of their credit card rewards plans and plotting how to maximize those points and miles to fund their next Instagram-worthy adventure.

Not so, according to TD Bank’s annual Consumer Spending Index, which polled more than 1,000 consumers across the nation. While millennials are more likely than members of any generation to have a rewards credit card, they are significantly more likely than baby boomers or any other group to not be optimizing or using their credit card rewards.

According to JD Power 2017 research, while rewards programs are the main reason why customers choose a particular card, 20 percent of rewards card holders would be better of with a different rewards card or one with a lower interest rate card without rewards.

Earning points does little good if consumers don’t use them. Not everyone fits neatly into a category or spending pattern just because they were born during a certain time period. But certain common experiences, especially those from our formative years, do affect the way we perceive value and how we tend to make financial decisions, including how we take advantage of credit card rewards.

Here’s how the generations are doing on taking advantage of credit cards and credit card rewards:

Baby boomers

Credit cards as we know them today were brought to us by the postwar baby boomer generation.

“Most rewards programs were designed in the 1980s by boomers for boomers,” says Barry Kirk, vice president for Maritz Motivation Solutions, a company specializing in customer loyalty and rewards programs.

In fact, baby boomers are said to be much better at spending than they are at saving. “It was on their watch that the credit card industry exploded, enabling what someone has called the democratization of luxury,” says Ann Fishman, author of “Marketing to the Millennial Woman.”

“Before baby boomers, you only had Diners Club cards. With baby boomers who love to spend, they pushed the credit card industry to explode,” says Fishman.

Boomers, by and large, are very active rewards card users, with 42 percent participating in card rewards programs, according to research by Worldpay, a global merchant processing company.

“With baby boomers who love to spend, they pushed the credit card industry to explode.”

How baby boomers use credit cards and rewards

Nate Masterson, director of finance at Maple Holistics, sees this as the natural inclination of a generation raised in a generally strong Western economy. During their formative years, “times were plentiful, and there would have been no real need for credit card rewards to serve as anything but icing on a financially secure cake,” he says.

Instead of using credit card rewards to get cash back or some other utilitarian purpose, many baby boomers appear to indulge their urge to splurge. “This can mean gift cards to a luxury store, a stay at a hotel or resort, or some other form of out-of-the-ordinary, excess indulgence,” Masterson says.

Boomers like their cards, but they do worry about security. A nationwide survey, conducted by Edelman Intelligence on behalf of Experian, found that people older than age 55 worried more about identity theft risks than did other generations.

What other generations can learn from baby boomers

More than any other generation, baby boomers aren’t about to let their credit rewards go to waste. According to the TD Bank study, only 8 percent of baby boomers have let rewards expire, compared to 19 percent of Gen X consumers and a startling 30 percent of millennials.

Boomers are also careful about card fees. Only 26 percent of them are willing to pay a fee to join a rewards program.

Generation X

Generation X consumers, born between 1961 and 1981, grew up with credit cards. They expect a lot from their cards; in fact, Fishman calls them credit card snobs.

How Generation X uses credit cards and rewards

“If they’re going to take out a card, they want that card to offer at least 50,000 airline miles, and a fairly low spending requirement to be met in a reasonable period of time,” says Fishman. “If they see a credit card offer with 50,000 to 70,000 frequent-flyer miles, and the obligation is to spend $1,000-$3,000 within three months, they’re going to jump on that card. If I need a new credit card, I go to a Gen Xer to see what’s new.”

What other generations can learn from Generation X

Gen X consumers are good at finding cards that meet their standards. They also work hard to get their credit card rewards. Fishman says they are the ones who keep the spreadsheets on what the rewards are, when you get them and every other detail of a credit card.

Some Generation X cardholders turn to technology to help them manage their cards and rewards points, using mobile apps such as’s Wallet app and The Points Guy’s TPG To Go. “Generation X has given rise to a whole industry for managing credit card points for those who don’t have the time or inclination to do it,” says Fishman.

“Generation X has given rise to a whole industry for managing credit card points for those who don’t have the time or inclination to do it.”

This willingness to track rewards or pay someone to do it for them pays off. Generation X cardholders are far less likely to let rewards expire than millennials.


Millennials are that much-talked-about group born between 1982 and 2000. Millennials may have mixed feelings about credit cards because they generally entered the job market during the long recession years.

Millennials may have graduated from college with big student loans, only to find a poor job market. Some of their parents lost jobs, businesses and even homes during the recession, and millennials may have seen their parents live off credit cards and get in trouble with credit card debt.

Coming of age during a time of instability may have made millennials more inclined to stick to cash and avoid credit.

However, according to the TD Bank survey, more millennials have a rewards credit card (87 percent) than any other generation, yet they’re the group most likely to let rewards go to waste. Relative to other generations, millennials are simply not taking full advantage of credit cards and rewards.

“Millennials are the least credit card-inclined generation we’ve seen since the advent of the credit card. When millennials do use credit cards, their rewards habits certainly differ as compared to other generations,” says Masterson.

According to the Experian survey, younger account holders are more likely than older generations to emphasize the importance of building credit.

How millennials use credit cards and rewards

Financially conservative millennials prefer two kinds of rewards: cash back and airline miles – for two distinct reasons. Masterson says, “No. 1, cash back is the simplest and most straightforward way for millennials to preserve their finances and feed back into their bottom line.”

Millennials also want airline miles, so they can travel the world. “Millennials are experience-driven and seek to explore the world not only for their own leisure, but for the sake of being able to share these experiences on social media,” says Masterson.

Millennials are 40 percent more likely than boomers to spend their points as soon as possible instead of saving them, and 67 percent of millennials are willing to pay a fee to join a program versus only 26 percent of boomers, according to Kirk.

“If I need a new credit card, I go to a Gen Xer to see what’s new.”

Plus, some millennials could give us all tips on how to squeeze the most value out of them. For example, Ryan Matzner, 33, co-founder of mobile app development agency Fueled, says he and his friends are total credit card junkies.

They use sites such as ThePointsGuy to maximize opportunities and special offers, like his Valentine’s Day trip. “I recently booked a weekend round-trip, first-class flight to Paris for less than 100,000 points,” he says.

What other generations can learn from millennials

Millennials are nobody’s fools. They’re marketing skeptics, but they are also brand loyal. “Seventy-six percent of millennials go out of their way to make a purchase from a brand they are loyal to,” says Kirk, according to Maritz data.

Millennials especially value companies that do good in the world – an admirable priority.

Generation Z

We have yet to see how Generation Z, the group born after 2000 and just now getting old enough to get credit cards, will use credit and credit card rewards. They are expected to be very different. Fishman believes they have watched the mistakes of older siblings and previous generations, such as taking on too much student debt. They have grown up in the shadow of 9/11 and terrorism.

“They want a peaceful life. They want to be stable. They had much too much stress in their early lives. They will manage their credit cards; the credit cards will not manage them,” says Fishman. Time will tell, Generation Z may turn out to be a financially conservative generation.

No matter what generation you’re in, it pays to be sensible and mindful about using credit cards and credit card rewards.

Julie Pukas, head of U.S. Bankcard and Merchant Solutions at TD Bank, says, “It takes smart spending to use your credit card for daily purchases – like groceries and dining – and discipline to ensure you pay off that balance at the end of each month. But for those who can make it work, it’s a very savvy credit strategy that makes your credit card work for you.”

Whether it’s using an app to help you manage rewards, comparing cards periodically to see where you can get the best deal, or applying cash back rewards to paying off debt or adding to savings, you can take full advantage of credit card rewards in the way that makes the most sense for you.

See related: New Uber rewards card is latest to target millennials, Millennials’ most common debt: Cards, not student loans, best credit cards for rewards

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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