Nearly 3 in 4 Premium Cardholders Used a Card-Linked Offer in the Past Year

Consumers who pay the most for their credit cards turn out to be the ones least likely to ignore them. Just 3.9% of premium cardholders report rarely or never using their high-fee plastic, making them the most loyal segment in the entire credit card market, according to new research from PYMNTS Intelligence.

The findings come from “How the Right Rewards and Offers Spur Credit Cardholders to Spend,” a PYMNTS Intelligence report based on a survey of 3,066 U.S. consumers. The study examines what drives cardholders to pick one card over another at the point of sale, and what keeps them coming back.

The picture that emerges is one of a market where rewards and tailored offers do far more heavy lifting than referral bonuses or brand loyalty alone. Entry-level rewards cards remain the most widely held, sitting in 59% of cardholders’ wallets, but premium cards punch well above their weight in actual usage, offer redemption and word-of-mouth recommendations.

Three Data Points Stand Out:

Card-linked offers split sharply by fee level. Among cardholders paying annual fees above $100, 74% redeemed at least one card-linked offer in the past year. For holders of free cards, that figure dropped to 32%. Only 18% of high-fee cardholders have never used a card-linked offer, compared to 57% of those with no-fee cards.

Rewards satisfaction drives referrals more than cash incentives do. When asked what would make them recommend a card to friends or family, 21% of cardholders ranked exceptional rewards as the top factor, followed by easy-to-redeem rewards at 19%. Referral bonuses ranked as the primary motivator for just 9.4% of cardholders. Premium cardholders were three times as likely as basic, no-rewards cardholders to have recommended their card multiple times.

Parents and paycheck-to-paycheck consumers manage their cards differently. Nearly 28% of cardholders with children hold premium cards, compared to 17% of those without. And 29% of consumers living paycheck to paycheck rotate between cards to manage credit limits and balances, suggesting that strategic switching is not limited to affluent households.

The report also surfaces generational divides in how consumers engage with merchant-sponsored cards. Nearly half of baby boomers and Generation X cardholders use a co-branded or single-store card, while only 1 in 3 Gen Z consumers does so. Co-branded cards, which run on standard payment rails and can be used anywhere, remain popular across income levels.

Single-store cards, restricted to one retailer, are the least likely to serve as a primary payment method, chosen by just 4.5% of holders. About 10% of single-store cardholders say they rarely or never use them at all.

When consumers were asked what they want most from co-branded cards, the answers were straightforward: 59% said better rewards or cash back, 50% wanted faster accumulation of loyalty points and 40% sought larger discounts. The least popular feature was app or digital wallet integration. That finding suggests issuers should focus less on technology bells and whistles and more on the tangible financial value a card delivers every time it gets swiped.

At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.