<\/p>\n
A pile of credit-card reward points can take you business class to Bali or cover a few days\u2019\u00a0stay in a London boutique hotel. These days, as inflation strains American budgets, more people say they\u2019re using points for daily essentials, from gasoline to cat litter.<\/p>\n
In a survey of more than 1 000 people, over 35% said they redeem reward points for \u201ceveryday expenses\u201d, according to USAA Federal Savings Bank. Statement credits also are popular, with 79% of respondents saying they\u2019ve used points that way at least once in the past six months.<\/p>\n
The results show\u00a0how persistent inflation is squeezing household budgets.\u00a0Grocery costs are up more than 6% since mid-2023 and gas is up about 30\u00a0cents a gallon. Inflation-adjusted wages, meanwhile, have risen at an annualized average pace of about 1.4% over the same period.<\/p>\n
\u201cAs living costs increase, practicality is the priority,\u201d said Michael Moran, president of USAA Federal Savings Bank. \u201cMore households are reassessing their finances and prioritising what\u2019s in front of them.\u201d<\/p>\n
A shopper looks at a refrigerator for sale inside an appliance store in Santa Clara, California. Image: David Paul Morris\/Bloomberg<\/p>\n
Consumers are shifting spending away from \u201cless time-sensitive purchases\u201d like appliances and furniture toward necessities such as food and gas, Moran said. They\u2019re taking the same approach with credit-card rewards, using points to stretch their budgets and help offset higher prices, he said.<\/p>\n
Cardholders accumulate reward points through everyday spending. Many cards offer bonus points for purchases in categories such as dining, groceries and travel, while new customers can earn sizable sign-up bonuses by meeting minimum spending requirements in the first few months after opening an account.<\/p>\n
As recently as 2023, Americans were most likely to redeem credit-card rewards for travel, according to Credit Karma. Today, they\u2019re prioritising groceries and gasoline instead.<\/p>\n
Read: Investec sweetens private-banking offer to lure rich clients<\/p>\n
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Natasha Brown, a 33-year-old Miami resident who recently lost her job as a user-experience researcher, said credit-card points and cash-back rewards have helped her money go further.<\/p>\n
Before each purchase, she looks for a way to earn rewards whenever possible. She also combines cash-back offers with rewards from her other credit cards, maximising the savings on everyday spending.<\/p>\n
Brown said she uses her Capital One card to\u00a0get rewards at cosmetics\u00a0chains Ulta Beauty and Sephora. She\u2019ll also\u00a0use points from her card to buy pet food and clothing.<\/p>\n
\u201cIn my head, it works like a coupon,\u201d\u00a0Brown said. \u201cYes, I\u2019m spending the money up front, but I\u2019m getting 20% back to spend later somewhere else. It\u2019s a nice way of feeling like I\u2019m getting a little bit of something back.\u201d<\/p>\n
The Consumer Financial Protection Bureau reported that Americans earned $47.5 billion in credit-card rewards in 2024, almost double the amount in 2020. About half of those rewards were earned as points.<\/p>\n
Nicole Sackett, a 35-year-old executive vice president at communications firm Edelman Smithfield\u00a0in New York, said her credit card offers 1.5% cash back on every purchase.<\/p>\n
She prefers to redeem those rewards as statement credits because she doesn\u2019t travel much and likes the simplicity of lowering her monthly balance. Statement credits allow cardholders to apply rewards directly to their credit-card balance, reducing the amount they owe.<\/p>\n
The strategy has helped Sackett keep expenses down as she paid off her student loans.<\/p>\n
\u201cThe vast majority of my discretionary spending is done on my credit card,\u201d Sackett said. \u201cThere\u2019s a convenience factor of knowing that I get a little bit of cash back.\u201d<\/p>\n
Drivers refuel vehicles at a gas station in Los Angeles. Image: Mark Abramson\/Bloomberg<\/p>\n
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At Bank of America Corp, more cardholders are using rewards to offset everyday expenses. Cash back has become one of the most popular features in the company\u2019s rewards programme, said Mary Hines Droesch, head of consumer and small business products and analytics.<\/p>\n
In June alone, client engagement with its cash-back feature reached three times greater traction than during the same period last year, she said. Gasoline is now the second-most popular redemption category for purchases, behind retail which includes grocery stores and shopping.<\/p>\n
The number of customers switching to gas as their cash-back category of choice climbed 27% in the first quarter, and demand continued to grow in April and May, Droesch said.<\/p>\n
Read: US inflation accelerates, though core gauge comes in softer<\/p>\n
Consumers tend to gravitate toward cash back during periods of higher inflation as they seek ways to offset rising everyday costs.<\/p>\n
\u201cPeople are really looking for deals right now,\u201d Droesch said. \u201cThey want to make the most of their money. We aren\u2019t seeing consumers significantly pull back, but because they recognize certain things are more expensive, they want to stretch their dollar.\u201d<\/p>\n<\/p>\n
More than 70% of respondents in the USAA survey said they redeem reward points every month or as soon as they become available. Only 24% said they save rewards for larger purchases or \u201cdream\u201d redemptions such as trips.<\/p>\n
Younger consumers are especially quick to cash in. Among Gen Z respondents, ages 18-24, 72% said they redeem reward points every month or as soon as they\u2019re available. They were also more likely than older consumers to use rewards for everyday expenses.<\/p>\n
USAA attributes much of the shift toward immediate redemptions to the growing number of \u201cpay-with-points\u201d options at checkout, particularly at grocery stores and gas stations.<\/p>\n
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More card issuers and retailers, including Amazon.com Inc, also now allow customers to redeem rewards at the point of sale, making it easier to use points for routine purchases.<\/p>\n
Read: Amazon sues to stop perplexity from using AI tool to buy stuff<\/p>\n
Cindy Flores, a 29-year-old financial analyst from West New York, New Jersey, said she has used her credit-card points on Amazon to buy skin-care products and supplies for her cat.<\/p>\n
\u201cIf I have, like,\u00a0$15 in cash-back rewards, why not use that to buy cat litter?\u201d she said. \u201cI know I have to buy cat litter.\u201d<\/p>\n
Flores usually redeems rewards as a statement credit or deposits the cash back into her savings account. But when she needs an inexpensive household item, she\u2019ll often use the pay-with-points option instead.<\/p>\n
The USAA survey suggests consumers are increasingly using pay with points\u00a0to manage everyday expenses rather than indulge in discretionary purchases. Only 26% of respondents said they redeem rewards for nonessential spending.<\/p>\n
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FNB really, really tightens the screws on eBucks with sudden changes<\/p>\n
\u201cPrices move faster than earnings, so households need time to readjust,\u201d Moran said.<\/p>\n
\u201cIf a tank of gas costs more this week than it did last week, a family may not have budgeted for it. Relieving that cost with rewards in real time means being able to handle new or unexpected expenses and creating a buffer to adjust budgets.\u201d<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Americans #creditcard #rewards #pay #groceries #gas<\/p>\n","protected":false},"excerpt":{"rendered":"
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