When it comes to credit card perks, the wealthy might not be that much different from the average guy, according to a survey done by CreditCards.com. Whether a consumer has $100,000 in the bank or just $1,000, cash back rewards appear to be the favored credit card reward.
The CreditCards.com survey, which polled individuals with investment assets above $100,000, showed that 60 percent favor cash back rewards as a credit card perk, which isn’t far off the 63 percent for all credit card holders. Frequent flyer miles were listed by 22 percent as the next preferred reward, followed by 7 percent who want free hotel stays, and 5 percent who like merchandise. Other perks like companion airline tickets or airport lounge access made up 3 percent of responses.
Broken down by gender and age, women and wealthy millennials favor cash back at rates higher than the national average, at 67 and 66 percent respectively, while 56 percent of men favor cash back compared to 25 percent who favor frequent flyer miles. Those that prefer frequent flyer miles (33 percent) though tend to be the ultra-wealthy, which the survey defines as people with more than $500,000 in investment income. This compares to the 53 percent in that same bracket who prefer cash back.
This makes it imperative for credit card companies to make cards that appeal to the wealthy with good cash back programs, which is a favorable demographic given the high rates of spending and reliability of paying the balance back in full, as well as an acceptance of new technology like digital wallets. Some perks tend to include advance concert tickets, hotel upgrades, and access to airport lounges as a way of enticing wealthy customers, but cash is still king. Fidelity Investments notes that the wealthy make up half of its 2 percent cash back Investment Rewards American Express card, and users earn roughly $75,000 per year as cash back, which is made up through fees paid by merchants.
The survey was conducted Jan. 15-21 among 793 adults with investment incomes more than $100,000.