Research and Statistics

Poll: 47 million Americans have picked up a tab to get card rewards

But nearly half of those consumers got stiffed in the process


Picking up a group tab with your card can be a good rewards-earnings strategy, unless your friends don’t repay you

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One out of every five consumers have picked up a tab for a group of people to earn credit card rewards, according to a new survey.

However, this strategically “polite” gesture is often risky, as many cardholders said their companions didn’t reimburse them.

The survey of 1,005 U.S. adults showed that 19 percent of respondents had picked up a tab – such as a dining bill, concert tickets or theater seats – for a group of people in order to rack up credit card rewards. And 44 percent of those people – 21 million Americans, per an extrapolation based on the U.S. adult population – said someone failed to pay them back.

“Obviously, if you pick up the tab on everything, you’re taking on more risk,” said Michelle Schroeder-Gardner, author of the personal finance blog Making Sense of Cents. “If you aren’t paid back for something, it will most likely defeat the purpose of points as you’ll probably spend more than the points you’ll earn.”

Here’s what else our survey found about consumers who pick up tabs to get rewards.

  • They tend to be high earners. People who make $75,000 or more per year were significantly more likely than consumers at all other income levels to say they picked up a tab to earn rewards.
  • They prefer to be repaid in bills. Two-thirds of consumers who picked up tabs for rewards said they prefer to be repaid in cash. Peer-to-peer payments (24 percent) are a distant second, followed by checks (5 percent) and online bill pay through their banks (4 percent).
  • Many of them may be from New York or California. People who live in the Northeast (25 percent) and the West (26 percent) were significantly more likely than Midwestern (16 percent) and Southern (13 percent) consumers to say they picked up a tab for rewards.
  • They’re likely to be parents. People who have children (23 percent) were significantly more likely to have paid a group bill to earn points than those without children (17 percent).
  • Their friends aren’t habitual nonpayers. When asked how often other people failed to repay them, 20 percent said “rarely” and 19 percent said “occasionally.” Only 5 percent said “frequently.”

The telephone survey of 1,005 adults was conducted May 4-6, 2018. See survey methodology

Treating everyone to dinner defeats the purpose of rewards

Footing a bill for friends or family members can be a good rewards-earning strategy – if you can trust them to repay you. If you don’t get reimbursed, you’ll be left with a big card balance that you may not be able to repay when the bill comes due. Then, any interest that is applied to the unpaid portion of the bill will wipe out the value of any rewards you accrue.

For example, let’s say you have a credit card that offers a quarterly 5 percent cash back bonus on restaurant spending. If you use your card to pick up a $100 restaurant tab for yourself and four other people, you’ll ultimately earn back $5 for that purchase. But if each person’s meal costs $20, and no one ever pays you back, you end up having paid $95 for the meal instead of $15 (the cost of your meal minus your cash back earnings).

Even if only one person fails to pay you back, it means you’ve spent $20 more than you intended to instead of saving $5 on your meal.

But there are cases in which you can still come out ahead despite not getting your money back after splurging on others for rewards. For instance, if a $100 dinner with friends puts you over the minimum spending requirement to earn a 50,000-point sign-up bonus on a high-end rewards card, that could outweigh the cost of getting stiffed by your fellow diners.

Getting repaid: A delicate dance of etiquette and communication  

Lifestyle and etiquette expert Elaine Swann said the high percentage of respondents who claimed they’ve been short-armed in the past suggests many payback failures are due to miscommunication.

“If you decide to pick up a tab in order to earn reward points, it’s important to make it clear that you expect to be paid back,” she said. “There is some etiquette to that because some people may take offense to it.”

Swann said the ideal situation in which to pick up a check to get rewards is when it also makes it more convenient for the entire group – at a restaurant that doesn’t split checks, for instance.

But don’t let the convenience factor drown out your true motive for paying the bill, otherwise the people you’re paying for could assume you’re just being generous.

Jesse Harrison, who runs an employment law firm in California, said he regularly uses his Chase Freedom Unlimited card to pay for dinner with his parents, who pay him back in cash. But sometimes his parents’ friends tag along as well.

“My parents have always paid me back,” Harrison said. “Unfortunately, some of their friends I’ve taken out have not. They saw it as a treat and didn’t offer to pay me back.”

Harrison said he has avoided asking for re-payment in these kinds of situations so as not to embarrass his parents.

However, we can’t be so polite in every situation, particularly when there’s a lot of money at stake. For instance, if you agree to buy plane tickets to the Bahamas for your best friend, his girlfriend and another “rando” who got invited at the last minute, you will no doubt insist on quick re-payment. Your friends’ failure to do so could fray the relationship and leave you with little pocket change to spend on swim trunks and sunblock.

“My parents have always paid me back. Unfortunately, some of their friends I’ve taken out have not. They saw it as a treat and didn’t offer to pay me back.”

Cash most popular repayment method

Not getting paid back for a card purchase can sometimes be the result of your friends not carrying enough cash – a tricky problem that can be resolved by using a payment app such as PayPal, Venmo or Zelle.

Yet 67 percent of survey respondents who have picked up a tab for rewards said cash is their favorite remuneration. Only 24 percent said they prefer peer-to-peer payments, though these methods are relatively popular among younger consumers. Consumers between the ages of 18-29 were significantly more likely than all other age groups to say they prefer peer-to-peer repayment.

Getting reimbursed in cash can also cut into your net rewards earnings if you don’t apply that cash directly toward your credit card bill.

“My friends and family all know that I’m a points person, so I almost always pay the bill with friends who prefer to pay by cash to me on the spot,” said Suzanne Wolko, author of the PhilaTravelGirl blog. “The downside is I often use the cash rather than deposit it into my bank for the credit card bill.”

Of course, if you often find yourself picking up a check for your parents or grandparents and expect repayment, asking for cash may be your best bet. In our survey, 91 percent of people age 65 and over said they prefer to be repaid with paper bills, and 77 percent of respondents aged 50-64 said the same. Such an overwhelming preference for cash among these groups suggests they prefer to repay other people that way, too.

Tips for picking up the tab

There’s nothing wrong with earning rewards by covering a check for someone else, but you must be clear about your intentions and have realistic expectations about how you’re going to be paid back.

Don’t wait until after a pricey meal with friends, family members or – heaven forbid – your date to spring it on them that you want to be reimbursed. And when seeking repayment, keep in mind that your college-age nephew might be just as likely to carry cash as your grandmother is to have Venmo on her phone.

Finally, don’t get so caught up in gobbling up rewards that you become a pest to your friends. They may not be so quick to repay you every time if you constantly draw your credit card like a sword to slay every dinner bill.

“In my opinion, it is a bit gauche to blatantly attempt to always pick up the tab in order to earn rewards points,” Swann said. “Take advantage of it if you are benefiting others.”

Survey methodology commissioned GfK Custom Research North America to conduct a telephone survey with 1,005 adults living in the continental United States between May 4-6, 2018. Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error is plus or minus 3 percentage points.

See related: Why savvy points earners always pick up the check, Entertaining clients on a business credit card: Tips to do it right, Should I apply for a new card just to get the bonus?

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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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