(New York, NY) While many cardholders are intrigued by innovative rewards structures, traditional cash back models continue to dominate the credit card landscape. Auriemma Group’s latest issue of Cardbeat US highlights how newer approaches—like increasing rewards with spend or fixed-dollar incentives—can appeal to targeted segments, even as flat and category-based cashback offers remain the most attractive.
Traditional rewards models offer familiarity and clarity, two qualities that consistently drive acquisition. Auriemma’s research finds that 70% of credit cardholders are attracted to high cashback on specific categories, and 67% to flat-rate cashback. By contrast, less conventional options—such as receiving $20 for every $300 spent (58%) or earning more cashback as spend increases (47%)—garner moderate but notable interest.
“Simplicity remains paramount even when alternative rewards structures offer the richest value proposition,” says Jonathan O’Connor, Senior Manager of Research at Auriemma Group. “The most attractive programs are those that strike the right balance—offering rewards that are not only compelling, but are also clearly understood and easily obtained.”
Who Prefers What? Demographics Shape Rewards Appeal
Interest in newer rewards structures is higher among younger cardholders, urbanites, revolvers, and those with annual household incomes of $75,000 or more—but traditional cashback schemes still come out on top in overall preference. These groups may be drawn to novel programs, but most cardholders favor predictable reward earnings. While high cashback on specific categories is increasingly familiar and attractive, 82% say they prefer consistent flat-rate rewards across all purchases, compared to 61% who prefer higher rates on specific categories—a preference that varies widely by demographic.
Among those traditional options, demographic differences come into sharper focus. Gen Z and Millennial cardholders, those with an annual household income of $75,000 or more, and those who hold multiple credit cards are more likely to favor high cashback on specific spending categories. Meanwhile, their older and lower-income counterparts tend to prefer flat-rate cashback for its simplicity and reliability. These distinctions underscore the importance of aligning card rewards with the values and routines of each audience segment.
“Rewards structures influence not only whether a cardholder applies, but how they’ll use the card once approved,” adds O’Connor. “Understanding these usage patterns is key to building long-term engagement.”
Strategic Implications for Issuers
Though traditional rewards still outperform in overall preference, alternative models present opportunities to reach underserved or overlooked segments. Auriemma’s findings offer three key considerations for issuers evaluating future rewards designs:
1. Simplicity is Scalable: Flat-rate rewards are not only easy to market—they also drive consistent usage across categories. These cards can become top-of-wallet options due to their clarity and versatility.
2. Framing is Fundamental: Complex rewards structures can work—when communicated effectively. Issuers looking to try something new should invest in straightforward language and relatable examples that help cardholders grasp the benefit immediately.
3. Segment for Success: Younger, urban, and higher-income cardholders are more open to alternative rewards. Targeted messaging and tailored card rewards could lead to conversion.
Together, these strategies point to a clear path forward: one where simplicity and personalization work in tandem to meet the evolving expectations of credit cardholders.
“Cardholders may be open to new ideas, but they’ll ultimately stick with what feels intuitive and rewarding,” says O’Connor. “For issuers, that means crafting offers that don’t just attract but sustain long-term engagement.”
Survey Methodology
The Payments Report
This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in February 2025 among 1,208 adult credit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying.
(New York, NY) Cardholders consider many factors when applying for a new credit card, with those offering no annual fees and attractive rewards structures being the most influential. Auriemma Group’s latest issue of Cardbeat US confirms that offering compelling rewards significantly impacts cardholder decisions, with a clear preference for flat cashback structures over tiered options. The simplicity and predictability of flat cashback resonates strongly with today’s applicants.
When presented with two rewards card structures of roughly equal cashback value, 48% of credit cardholders prefer the flat cashback structure, while 43% lean toward the tiered structure. Although this difference may seem modest, it widens significantly when it comes to application likelihood. 70% of cardholders say they are likely to apply for a flat cashback card, compared to 58% who would apply for a tiered rewards card, if offered by a trusted issuer. These findings highlight the competitive edge of straightforward earning structures.
Cardholders also have high expectations of their credit cards, often looking for value that goes beyond standard offerings. Auriemma’s research found that while a 2.5% flat cashback rate is not common and typically comes with various conditions, many cardholders perceive this level of return as being in line with today’s industry standards. This expectation underscores the challenge for issuers to balance generous rewards with sustainable program structures, especially as preferences vary by demographic.
For instance, issuers aiming to attract Gen Z may find that tiered rewards structures hold unique appeal. This cohort shows a slight preference for tiered rewards, suggesting they may appreciate the potential for optimized earnings that this model offers. By aligning rewards with Gen Z’s preferences, issuers may improve acquisition among younger cardholders.
“While there are reasons to gravitate toward one rewards product over another, flat rewards require little work and mental math on the part of the cardholder,” says Jaclyn Holmes, Director of Research at Auriemma Group. “This makes it the smart option for those who don’t want to give their credit cards much thought, enabling more seamless and stress-free spending experiences.”
Flat rewards structures also hold a distinct advantage in day-to-day usage, with 46% of rewards cardholders reporting that their most frequently used card offers flat cashback. This shows that ease and versatility may make flat cashback cards the popular choice across spending categories, contributing to top-of-wallet status.
Flat cashback cards provide an accessible, simple way to earn, appealing to mass consumers and driving spending across various merchants. Issuers may find that a straightforward rewards model fosters ongoing card usage, as cardholders don’t need to track changing categories to maximize their rewards.
“Flat rewards offer a win-win for both cardholders and issuers,” says Holmes. “Cardholders can enjoy the effortlessness of earning, while issuers benefit from increased acquisition and engagement. As the credit card landscape evolves, prioritizing simplicity in rewards can be a powerful differentiator.”
Survey Methodology
Cardbeat US
This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in September 2024 among 801 adult credit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying.
(New York, NY) Credit card reward marketplaces such as American Express Membership Rewards, Chase Ultimate Rewards, and Capital One Shopping are becoming a core feature for many credit cardholders. According to Auriemma Group’s latest Cardbeat US report, three-in-five credit cardholders have access to a rewards redemption marketplace, and nearly three-quarters redeem through them for travel bookings, merchandise, gift cards, and more. This method of redemption is even more popular among co-brand credit cardholders, presenting brands with a valuable opportunity to reach a broad audience through these rewards marketplaces.
Although credit cardholders have a variety of available redemption options, the research revealed that the majority redeem their points for the same type of reward every time (86%) and prefer to redeem in one specific category (71%). Most cardholders report saving their points or miles until they have enough for a large redemption.
“Cardholders view their credit card rewards as a means to an aspirational purchase” says Jaclyn Holmes, Director of Research at Auriemma Group. “Cardholders have become accustomed to having a variety of redemption choices and increasingly expect that their favored brands will be available wherever they shop.”
Cardholders are evenly split whether they want to redeem their rewards while shopping with a merchant or through their credit card issuer’s rewards marketplace. Over half believe credit card points are worth the same no matter how they’re redeemed, meaning access and availability largely drive redemption choices.
“While some cardholders passively earn and redeem the rewards they earn, others are more strategic than ever—not just in how they earn rewards, but in how they maximize their value through thoughtful redemption,” says Holmes. “This level of savvy doesn’t just influence their choice of card—it defines their experience with it, driving long-term loyalty and satisfaction.”
Rewards marketplaces are becoming a key driver of card usage as well, with 57% saying their rewards marketplace encourages them to spend more on the associated card. While cashback continues to be the category most redeemed, two-in-five marketplace users commonly redeem for T&E purchases.
As the landscape of rewards redemption continues to evolve, credit card issuers looking to enhance their marketplaces must ensure they are meeting the needs of their diverse cardholder base. The challenge will be to continue providing value and convenience in a way that keeps cardholders engaged and satisfied.
Auriemma Group’s research and partnerships teams are well-equipped to help issuers strategically enhance their card’s value proposition and optimize their rewards marketplace offerings. With deep industry insights and a collaborative approach, Auriemma Group provides the expertise needed to tailor rewards programs that align with cardholder preferences and drive long-term loyalty.
Survey Methodology
Cardbeat US
This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in June 2024 among 800 adult credit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying.