New Data Shows Premium Cards Win Big as Consumers Chase Top-Tier Rewards

How you pay for that new sofa you just bought on Wayfair matters deeply to the bank that issued your credit card. Consumers have, on average, roughly three credit cards, making the one whipped out most frequently a driver of fees for the issuing bank.

You may want to shop as much as financially possible, but card-issuing financial institutions also want you to do that — and to pay as often as possible with their particular card.

A forthcoming report from PYMNTS Intelligence, “How Consumers Decide Which Credit Cards to Pay With,” digs into how and why shoppers decide to use a given piece of plastic when checking out with a purchase.

It’s hardly a surprise that credit card rewards, offers and benefits are a key driver behind which card consumers decide to use. But specifically which perks, and which cards, drive spending?

Based on a survey of more than 3,000 U.S. consumers in January, the report reveals that most Americans have cards with standard, no-frills perks like cash back or points, or popular co-branded cards tied to retailers, airlines or hotels. Nearly six in 10 cardholders own an entry-level card with basic rewards, and more than four in 10 have a co-branded card.

Nearly half of credit cardholders use their entry-level rewards card as their primary payment method. Cards without rewards? They’re the primary choice for fewer than 9% of cardholders and are rarely or never used by 15% of their owners. And those cards only usable at a single store? A mere 4.5% of owners whip them out at the register.

The message is clear: If there aren’t rewards, the card is likely gathering dust in your pocketbook.

High Rollers

Here’s where things get interesting. While only about one in five cardholders own a premium card with an annual fee of over $100, these folks are incredibly engaged. More than half make their premium card their primary payment method. Just a tiny 3.9% report rarely or never using them.

Premium cardholders are the most loyal shoppers, paying a high fee, determined to get their money’s worth and using the cards frequently to maximize benefits. Think of a luxury credit card as the butler in your wallet.

Card-linked offers are also a big deal, especially for those premium cardholders. Owners of cards with annual fees over $100 were more than twice as likely to take advantage of their card’s special offers compared to those with no-fee cards. A remarkable 74% of premium cardholders used at least one offer in the past year, compared to just 32% for no-fee card owners. Present the right offer to a premium cardholder, and there’s a good chance they’ll take it.

See also: Best-In-Class Modern Card Issuer: Driving Customer Lifetime Value Through Innovation

Card Merry-Go-Round

Back to regular consumers with multiple cards. Among many findings, the report reveals that one in four cardholders with multiple cards carefully choose which card to use for specific purchases to get the most benefits. Think of using a card with points for dining out for dinner, or a travel card for flights. This calculated approach means barely one in four cardholders stick to just one card most of the time.

Age and family structure matter too; one-quarter of cardholders with kids and nearly three in 10 of those living paycheck-to-paycheck rotate cards, potentially managing tighter finances or bigger expenses. Cardholders whose primary card is co-branded are particularly likely to strategically rotate to maximize rewards.

More like this: The Credit Economy: Top-of-Wallet Credit Cards