Consumer Credit Economy Report

Consumers Focused on Rewards Are Less Likely to Have or Want Loans

December 2024

When PYMNTS Intelligence looked at consumer credit habits, we found two intriguing segments: Consumers who seek rewards when they access credit and consumers on the credit treadmill that consistently seek more and better products. This report spotlights important differences in how key consumer subgroups like these approach credit.

Get Unlimited Access
Complete the form below for free, unlimited access to all our Data Studies, Trackers, and MonitorEdge reports.

Thank you for registering. Please confirm your email to view all our Trackers.

    yesSubscribe to our daily newsletter, PYMNTS Today.

    By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions.

    Credit habits reflect a mix of priorities and financial constraints. Some consumers focus on maximizing rewards, leading them to use credit cards heavily. Others want to use a wider range of credit products, either to maximize financial flexibility or just to stay afloat.

    PYMNTS Intelligence’s latest report dives into these key differences in credit use and demand across credit user personas — key groups of credit users whose tendencies shed light on nuances in the credit ecosystem.

    For example, consumers who fit our persona group of reward seekers are much less likely than others to have or want loan products. Meanwhile, loans play a central role for other consumers, especially those we classify as being on the credit treadmill, struggling to make minimum payments. Nontraditional credit products, such as debt consolidation and payday loans, represent the widest usage gaps.

    These are just some of the findings detailed in “Rewards Seekers Show Less Appetite for Loans,” a PYMNTS Intelligence special report. The report examines consumer credit use across credit user personas. It draws on insights from a survey of 2,336 U.S. consumers conducted from Nov. 8 to Nov. 16.

    Credit Use Personas

    Reward seekers: These consumers pay their credit and store card balances in full every month.

    Cash cushion: These consumers pay more than the minimum but less than the full balance on their credit and store cards each month.

    Credit treadmill: These consumers make the minimum payment or less on their credit and store cards each month.

    The Loan Gap

    Loans hold less appeal for reward seekers than for other consumer.

    When it comes to credit, we see a clear divide among consumers. Reward seekers have 2.4 credit products, on average, while credit treadmill and cash cushion consumers average 3.1, about 29% more. Reward seekers hold slightly more credit and store cards, on average, than the other two groups, making the higher averages for other personas stand out.

    Closer analysis reveals that the difference in loans accounts for the gap. Reward seekers hold just 0.7 traditional loan products — home, auto, student and personal loans — on average. Meanwhile, cash cushion and credit treadmill users have 1.1 on average, or 57% more. The difference grows for nontraditional products, such as debt consolidation and payday loans. Reward seekers hold just 0.2 of these products on average, while cash cushion and credit treadmill users each have more than twice as many.

    Overall, the data highlights an important split in how consumers are approaching credit. Reward seekers tend to focus on using their favorite credit products to strategically maximize earn points, miles and other benefits. Meanwhile, the other two personas likely want or need to use additional credit products to maintain financial flexibility.

    Loans and the Credit Treadmill

    Credit treadmill consumers are especially likely to have student loans and high-interest loans.

    Credit treadmill consumers struggle to keep up with payments and typically seek additional credit lifelines. Student loans are a key factor in this dynamic. Twenty-one percent of credit treadmill consumers have student loans, more than the corresponding 17% of cash cushion users and 6.6% of reward seekers. At the same time, credit treadmill consumers are much less likely to have completed a college degree than reward seekers, at 13% versus 51%, respectively. This suggests that many in the credit treadmill group could be saddled with payments for incomplete degrees that did not boost their earnings.

    The financial picture for credit treadmill consumers becomes clearer for nontraditional loans. Twenty-one percent of the credit treadmill persona group has at least one debt consolidation, home equity, pawn shop, payday or rent-to-own loan. This exceeds the corresponding 17% for credit cushion users and 7% for reward seekers. Notably, credit treadmill consumers are particularly likely to have loan types that tend to have high interest rates. For example, 13% have a payday loan, versus 8.7% for cash cushion users and 2.9% for reward seekers. Debt consolidation follows a similar pattern, with a leading 9.2% of credit treadmill consumers holding these loans, more than the 7.3% of cash cushion users and 2.4% of reward seekers.

    Interest in New Loans

    Credit treadmill and cash cushion consumers are more interested in getting new loans than reward seekers.

    Regardless of credit persona, the average consumer is interested in obtaining about two new credit products. Reward seekers come in at 2.1 new products, on average, versus two for credit treadmill and 2.2 for cash cushion consumers.

    Differences are clearer when we zoom in on loans, especially nontraditional ones. Reward seekers want 0.4 new nontraditional loan products, on average. This climbs to 0.68 wanted additional nontraditional loan products for credit treadmill consumers, a 70% increase, followed closely the 0.64 wanted by cash cushion users. For traditional loans, the difference is smaller but still sizable, with reward seekers wanting 0.34 on average and the other two groups each averaging 0.43.

    A particularly large gap is present for debt consolidation loans. Only 5.2% of reward seekers indicate interest in obtaining this product, but that share jumps nearly fourfold for the other personas. To be exact, 19% of credit treadmill consumers and 18% of cash cushion users are interested in debt consolidation loans. This highlights a notable trait of reward seekers: that they rarely look for financing out of necessity.

    Read More

    PYMNTS Intelligence is the leading provider of information on the trends driving consumer finance. To stay up to date, subscribe to our newsletters and read our in-depth reports.

    Methodology

    Rewards Seekers Show Less Appetite for Loans,” a PYMNTS Intelligence exclusive report, is based on a survey of 2,336 U.S. consumers conducted from Nov. 8 to Nov. 18. The report examines consumer credit use across credit user personas. Our sample was census-balanced to reflect the U.S. population: 51% of respondents identified as women, the average age of respondents was 48 and 38% earned more than $100,000 annually.

    About

    PYMNTS INTELLIGENCE

    PYMNTS Intelligence is a leading global data and analytics platform that uses proprietary data and methods to provide actionable insights on what’s now and what’s next in payments, commerce and the digital economy. Its team of data scientists include leading economists, econometricians, survey experts, financial analysts and marketing scientists with deep experience in the application of data to the issues that define the future of the digital transformation of the global economy. This multilingual team has conducted original data collection and analysis in more than three dozen global markets for some of the world’s leading publicly traded and privately held firms.

    The PYMNTS Intelligence team that produced this report:
    Scott Murray: SVP and Head of Analytics
    Lauren Chojnacki, PhD: Senior Research Manager
    Daniel Gallucci: Senior Writer
    Matt Vuchichevich: Senior Content Editor, Head of Reports


    We are interested in your feedback on this report. If you have questions or comments, or if you would like to subscribe to this report, please email us at feedback@pymnts.com.

    Disclaimer

    The Consumer Credit Economy Report may be updated periodically. While reasonable efforts are made to keep the content accurate and up to date, PYMNTS MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, REGARDING THE CORRECTNESS, ACCURACY, COMPLETENESS, ADEQUACY, OR RELIABILITY OF OR THE USE OF OR RESULTS THAT MAY BE GENERATED FROM THE USE OF THE INFORMATION OR THAT THE CONTENT WILL SATISFY YOUR REQUIREMENTS OR EXPECTATIONS. THE CONTENT IS PROVIDED “AS IS” AND ON AN “AS AVAILABLE” BASIS. YOU EXPRESSLY AGREE THAT YOUR USE OF THE CONTENT IS AT YOUR SOLE RISK. PYMNTS SHALL HAVE NO LIABILITY FOR ANY INTERRUPTIONS IN THE CONTENT THAT IS PROVIDED AND DISCLAIMS ALL WARRANTIES WITH REGARD TO THE CONTENT, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT AND TITLE. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF CERTAIN WARRANTIES, AND, IN SUCH CASES, THE STATED EX CLUSIONS DO NOT APPLY. PYMNTS RESERVES THE RIGHT AND SHOULD NOT BE LIABLE SHOULD IT EXERCISE ITS RIGHT TO MODIFY, INTERRUPT, OR DISCONTINUE THE AVAILABILITY OF THE CONTENT OR ANY COMPONENT OF IT WITH OR WITHOUT NOTICE.

    PYMNTS SHALL NOT BE LIABLE FOR ANY DAMAGES WHATSOEVER, AND, IN PARTICULAR, SHALL NOT BE LIABLE FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR INCIDENTAL DAMAGES, OR DAMAGES FOR LOST PROFITS, LOSS OF REVENUE, OR LOSS OF USE, ARISING OUT OF OR RELATED TO THE CONTENT, WHETHER SUCH DAMAGES ARISE IN CONTRACT, NEGLIGENCE, TORT, UNDER STATUTE, IN EQUITY, AT LAW, OR OTHERWISE, EVEN IF PYMNTS HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

    SOME JURISDICTIONS DO NOT ALLOW FOR THE LIMITATION OR EXCLUSION OF LIABILITY FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES, AND IN SUCH CASES SOME OF THE ABOVE LIMITATIONS DO NOT APPLY. THE ABOVE DISCLAIMERS AND LIMITATIONS ARE PROVIDED BY PYMNTS AND ITS PARENTS, AFFILIATED AND RELATED COMPANIES, CONTRACTORS, AND SPONSORS, AND EACH OF ITS RESPECTIVE DIRECTORS, OFFICERS, MEMBERS, EMPLOYEES, AGENTS, CONTENT COMPONENT PROVIDERS, LICENSORS, AND ADVISERS.

    Components of the content original to and the compilation produced by PYMNTS is the property of PYMNTS and cannot be reproduced without its prior written permission.