A recent study by CardHub shows that about one-third of credit card rewards are never redeemed, despite card companies providing about $48 billion in rewards each year.
Some of the blame belongs to forgetful consumers who don’t keep track of the rewards points they’ve been earning. But the study also found that limitations set on redemption and the way points can be earned prevent cardholders from realizing the full potential of rewards programs.
CardHub‘s study compared rewards credit card offers from the 10 largest credit card issuers, deciphering the fine print of dozens of rewards programs to determine which ones were the easiest to use. Then it scored the credit card companies in several categories.
Here are major findings:
- Capital One cards have the fewest reward limitations. All Capital One cards received an overall Rewards Friendliness Score of 96.43%.
- The Discover It Card has the most rewards limitations, earning the lowest overall score in this study (50%).
- Requirements that consumers meet a minimum threshold before rewards could be redeemed and rewards expiring after a missed payment were the most common limitations found amongst all reward cards. The first limitation was triggered by 79% of the reviewed cards, while the second was triggered fully by 36% of the cards and partially by another 54% of the reviewed cards (i.e. 90% in total).
- Barclaycard, Capital One and Wells Fargo received the highest scores (100%) in the Rewards Earning category, while Discover received the lowest score (50%).
- Capital One received the highest score (100%) in the Rewards Redemption category, while Discover received the lowest score (60%).
- Bank of America received the highest score (100%) in the Rewards Expiration category, while Citibank, Barclaycard, and Discover tied for the lowest score in this category (33.33%).
CardHub found that the most common requirement among credit card rewards programs that prevent consumers from redeeming rewards is a minimum spending threshold. Rewards expiring after a missed payment were the most common limitation among the cards.
See CardHub’s study for tips on avoiding rewards limitations.