Survey: 72% of Credit Card Debtors Still Chase Rewards Despite High Interest Rates
Most credit cardholders carrying debt (72%) continue chasing rewards despite high interest rates, according to a new survey. This approach could be costing them significantly more than the rewards are worth.
Key Findings:
- 76% of Americans have at least one credit card
- 72% of those carrying a balance still pursue rewards
- 54% say paying off credit card debt has become harder in the past year
- Interest rates of 20-30% far outweigh typical rewards of 1-5%
Demographics Most Likely to Chase Rewards:
- 89% of Gen Z cardholders (ages 18-28)
- 87% of households earning $100,000+
- 85% of millennial cardholders (ages 29-44)
Credit cards chasing rewards trophy
Debt Payoff Challenges:
- 31% say it's become "much harder" to pay off debt
- 23% report it's "a little harder"
- Gen X (66%) and Boomers (56%) struggle most with debt payoff
- Only 18% say debt payoff has become easier
Smart Strategies to Handle Credit Card Debt:
- Prioritize debt payoff over rewards
- Create a structured repayment plan
- Consider a 0% balance transfer card
- Use cash or debit for essential purchases
- Seek credit counseling from nonprofit organizations
Credit cards chase rewards and trophy
Expert Advice: "It doesn't make sense to pay 20, 25 or 30 percent in interest just to earn a few percentage points in cash back or travel rewards," says Ted Rossman, Bankrate senior industry analyst.
The bottom line: While credit card rewards can be valuable, they're not worth pursuing if you're carrying a balance. Focus on paying off debt first, then return to maximizing rewards once you can pay your balance in full each month.