Money Matters: Inflation and Credit Cards

 With more than 4 in 5 people reporting that inflation has made them more interested in earning credit card rewards and the busy summer travel season right around the corner, WalletHub today released its report on 2022’s Best Credit Card Rewards Programs, along with a nationally representative consumer survey and editors’ picks for the Best Rewards Credit Cards for Summer 2022.

Please find key takeaways below, along with commentary from WalletHub experts (audio files included).

• It Pays Big to Compare Cards: The best rewards cards can yield up to $1,204 more than the worst rewards cards over the first two years.
   
• Best Issuer: Capital One has the best credit card rewards program for the seventh year in a row, earning an average WalletHub score of 92%.
   
• Increased Demand for Gas Rewards: 61% more Americans want bonus rewards on gas purchases this year compared to 2021.
   
• Consumers Want Cash Back: 79% of people are most interested in earning cash back rewards, topping rewards points and miles by a wide margin.
   
• Extra Business for Bonus Rewards: 57% of people go out of their way to spend money with companies that give them extra credit card rewards.
   
• Envy Over Free Travel: Around 2 in 5 Americans are jealous of people who pay for trips with credit card rewards.
   
• Annual Fees Scare People: Most people (54%) say they would never apply for a credit card with annual fees.

 

Has inflation changed the way people view credit card rewards?
“More than 4 in 5 people say inflation has made them more interested in earning credit card rewards, according to a new WalletHub survey. When everything costs more than usual, being able to save hundreds of dollars just by choosing the right credit card and spending normally can really help make ends meet,” said Delaney Simchuk, WalletHub analyst. “The best rewards credit cards can save the average person more than $1,200 during the first two years of use. The key is to pay the bill in full every month and avoid interest because rates are rising along with prices at the gas station and grocery store.”
 
Are gas rewards more popular now than in previous years?
“A new WalletHub survey found that 61% more Americans want bonus rewards on gas purchases this year compared to 2021,” said Delaney Simchuk, WalletHub analyst. “The national average price of regular gasoline has increased by roughly 150% in the past 12 months. Saving up to 5% with one of the best gas rewards credit cards can help, as can shopping around for a place to fill up and reconsidering whether all of your driving is truly necessary.”
 
What is the most popular type of credit card rewards?
“Cash back is the most popular type of credit card rewards by a wide margin,” said Delaney Simchuk, WalletHub analyst. “Roughly 79% of people say they want cash back rewards the most, according to a new WalletHub survey, while airline miles and gas rewards each only got 8% of the vote and hotel points got 5%. People know exactly how much they’re earning with cash back rewards, and cash back can’t be devalued by credit card companies like points and miles.”
 
Should people go out of their way to spend money with companies that give them extra credit card rewards?
“Roughly 57% of people say they go out of their way to spend money with companies that give them extra credit card rewards, according to a new WalletHub survey. There’s nothing wrong with rewarding companies with business if they help you earn credit card rewards, but be careful not to overspend. Expensive credit card interest charges will more than wipe out whatever you save with rewards. Shoppers should also be careful not to spend money with a company just to earn extra rewards if the company’s prices are a lot higher than what its competitors charge,” said Delaney Simchuk, WalletHub analyst.

What advice do you have for people looking to save money with a rewards credit card in 2022?
“The secret to saving money with a rewards credit card is to choose the right card, based on your credit score and spending habits, and then use that card responsibly. You don’t want to overspend because credit cards with good rewards usually have high interest rates,” said Delaney Simchuk, WalletHub analyst. "If you want to take things to the next level, you can aim to gradually obtain a collection of rewards cards that each excel in a particular purchase category. You could have one card for gas, another for groceries and another for travel, for example.”