Credit Card Rewards Hub

Below is a comprehensive analysis of the potential annual savings that can be achieved through credit and debit card rewards, cash-back programs and loyalty points for the average consumer. These rankings result from a thorough evaluation of historical and current return trends, reward structures and promotional offers. The analysis also includes a detailed comparison of various credit and debit cards and an overview of current transactions on platforms such as e-commerce and other platforms.

Savings on Credit Card Rewards

Credit card rewards typically include cash back, points, and miles. The average consumer spends about $61,000 per year (2023 data from the Bureau of Labor Statistics), a significant share across compensation categories.

Assumptions

• 40% of the total spend cost on your credit card.
• Premium Price:
  • 1-2% on total purchase.
  • 3-5% on purchases from certain categories like food, grocery or travel.

Calculation

• Typical purchase cost: $24,400 × 1.5% (average rate) = $366 per year
• Bonus category expenses (40% of credit card spend): $9760 × 4% (average rate) = $390.4 per year

Total credit card savings: $756.4 per year.

Save on Debit Card Benefits

Debit cards offer fewer rewards than credit cards. Let’s assume the spend bonus is between 0.5% and 1%:

• 40% of the total spend cost on your debit card.
• Debit card fees: $24,400 × 0.75% (average rate) = $183 per year

Cashback Offers & Promotions

Many cards and apps offer extra cash back on purchases at certain stores or during promotional periods.

• We get average 1.5% cashback without using credit card and debit card with spending 20% of total spend
• Estimated annual savings from cashback promotions: $183-$244/year

Average: $213 per year.

Point Redemption Amount

For credit cards that offer points instead of cashback, the average redemption rate is 1.25 cents per point. At an average rate of 2% cashback on eligible spend:

• Total points: $12,200 × 2% = 244 points.
• Value of redeemed points: 244 x 1.25 cents = $305 per year

Total Annual Savings

Add all categories:

• Credit Card Rewards: $756.4.
• Debit Card Rewards: $183.
• Cash Back Promotions: $213.00.
• Points Redemption: $305.

Estimated Total Annual Savings: $1457.4

Percentage of annual income saved

The median household income in the U.S. is approximately $61,000/year. The percentage saved through rewards is: $\frac{\text{Savings}}{\text{Income}} × 100 = \frac{1,457.4.25}{61,000} × 100 = 2.38\%$

Breakdown by Cost Category (Example)

Important information For customers

1. Increase your spending. Using credit cards with higher rewards rates in certain categories allows you to maximize your savings.
2. Avoid Interest Payments: Always pay the balance in full to avoid losing rewards due to interest payments.
3. Combine the sentences. Use in-store discounts, promotions, and apps like Rakuten or Ibotta to earn rewards.
4. Annual Savings Potential. With proper planning, consumers can save 2-5% on their annual spending through cash back and rewards programs.