Gen Z Leads the Hunt: 65% of Young Consumers Actively Seek Card Rewards

The battle for credit cardholder loyalty is being waged not just on the traditional fields of points and miles, but on the more personalized terrain of relevant and easily accessible benefits.

A new report, “Beyond Points and Perks: How Relevant Benefits Drive Cardholder Engagement,” a collaboration between PYMNTS Intelligence and Banyan, delves into the evolving landscape of credit card rewards programs, revealing that cardholder engagement hinges on the ease of accessing and the personalization of card-linked offers. The study, based on a survey of 2,826 U.S. consumers conducted in late 2024, highlights a crucial shift in how card issuers can foster loyalty and encourage more frequent card usage.

The report’s findings underscore that while many cardholders appreciate earning and redeeming loyalty rewards, the actual use of these benefits varies significantly. Notably, only 1 in 5 cardholders redeem credit rewards at least monthly, though frequent card users do so more regularly.

A key takeaway is that active engagement with card-linked offers is likely to boost credit card use, provided these offers align with consumers’ everyday needs. The relevance of these offers is primarily determined by their ease of access and the level of personalization, with over 70% of users citing these factors as impacting their appeal.

The study identifies “deal hunters,” particularly Gen Z consumers and parents, as the most proactive in seeking out these offers. Conversely, consumers who find card-linked offers difficult to access are less inclined to use them.

Key data points from the report illustrate these trends:

Ease of access and personalization are paramount: 75% of cardholders indicate that ease of access makes card-linked offers more appealing or relevant, while 74% say the same about personalization factors.

Proactive deal seekers are more engaged: Nearly half (46%) of card-linked offer users proactively hunt for offers, and these users redeem rewards more frequently (an average of 6.1 times per year compared to 4.3 times for passive users).

Inconvenience is a major barrier: Among cardholders who don’t fully use their card benefits, 56% cite inconvenience as the primary reason.

The report also uncovers insights into redemption preferences and the impact of reward types. For instance, while applying rewards as a statement credit is a common method, cardholders who redeem for specific items through the card issuer’s program or on a shopping portal tend to redeem more frequently.

Furthermore, satisfaction with merchant-specific and product-specific discounts correlates with higher redemption rates and greater use of available benefits.

The study suggests that by streamlining benefit discovery and activation processes, and by tailoring offers to align with cardholders’ spending habits, credit card issuers can enhance customer engagement and loyalty. The findings also highlight the importance of multichannel communication strategies to reach different segments of reward seekers effectively.