Previously, consumers flocked to cards that were simple – that provided good rewards on all spending. Now, high rewards earnings have lured consumers to cards that offer great rewards on certain purchases, with lower rewards on base purchases. We will dive into key trends in credit card rewards and how these categories are performing.

Issuers offer consumer credit cards with high rewards on a variety of categories

More than two thirds of brand rewards cards from top issuers offered elevated earnings on two or more categories (tiered rewards) as opposed to offering flat earning rates across all purchases. This includes cards that offer higher earnings on purchases in specific categories, for example, a card that offers 3% cash back on dining and on gas station purchases, and 1% cash back on all other purchases. 

Over a third of the cards offer bonus earnings in five or more categories, which gives cardholders great flexibility and opportunities for earning rewards but requires them to make the effort to understand and optimize their earnings. With all the options, which credit cards are most popular among consumers?

Credit cards with tiered earning categories grow

Comscore's Custom Digital Behavioral Panel data is uniquely positioned to allow us to examine not only what credit cards offered in the market, but also how they performed. While overall digital applications for credit cards were mostly flat (-2%) from 2021 into 2023, rewards cards grew +5% during this same time.

Applications for cards that offered tiered earnings grew at an even higher rate of +8%, reaching 22.4M applications in the full year of 2023. Cards with elevated earnings on two to five categories saw the strongest growth, including products from American Express, Chase, and Capital One. This number of categories might just be the sweet spot, giving cardholders the flexibility of various rewards options without overwhelming them with too many categories.

Next, we will dive into the trends of some of the top performing categories, including cards that offered elevated earnings on daily purchases like groceries or gas, and travel purchases like transit, travel portals, and hotel stays.

Consumer demand for gas and grocery credit card bonuses surge

Between 2021 and 2023, application volumes for rewards credit cards that offered 2x earnings or more on gas purchases grew by 19%, driven by popular cards from major issuers such as American Express, Capital One, and Wells Fargo. Fitting with this trend, American Express increased the earnings on gas for its Blue Cash Everyday from 2% to 3% cash in July 2022, contributing to the strength of the segment in 2023.  

Higher earnings on groceries were also among the top drivers for rewards cards strength, as application volumes for these cards grew 16% over the last two years, driven by cards that offered even higher earnings of at least 3%: like American Express's Blue Cash suite and its Gold Card. 

The demand for credit cards with high earnings on groceries does not mean that people are no longer interested in rewards at restaurants! Cards with at least 2x earnings on dining (often including take-out and delivery) grew by 12% over the last two years. The popular Chase Freedom Unlimited added 3% cash back on dining category in September 2020, helping drive growth in the industry.

This trend continues to develop as issuers get creative to make themselves stand out. Wells Fargo's recently launched Attune Card offers 4% cash back on a variety of lifestyle categories not typically included with other cards, like fitness and wellness, live sports and entertainment events, recreation, transit, and EV (Electric Vehicle) charging, in addition to 1% on all other purchases, a first in the industry among major brands.

Return of travel translated into increased demand for cards with higher earnings on travel purchases

Applications for rewards credit cards that offered 2x increased earnings on various travel categories grew by 14% to16% over the last two years as consumers sought to add value to their travels. Major issuers, including American Express, Capital One, Citi, and Chase tend to save the highest earning rates (5x and more) for airline, hotel, and car rental booked through their travel portals. To learn more about what issuers are doing with their travel portals, check out this blog.

The proprietary travel cards segment expanded over the last few years:

• Capital One launched its premium Venture X in late 2021, offering 5x miles on flights and 10x miles on hotels and rental cars when booked with Capital One Travel portal, plus 2x miles on all other purchases.
• Wells Fargo launched Autograph in May 2022, earning 3x points on travel, among other benefits.
• More recently, Autograph Journey was launched in March 2024 and it earns 5x points on hotels, 4x points on airlines, and 3x points on other travel purchases.

Higher earning rates on travel are not restricted to travel cards only: popular cash back cards, such as Chase’s Freedom Flex and Freedom Unlimited cards, offer elevated earning rates on travel purchases, while other cards, that let cardholders choose the categories for higher rewards (Bank of America’s Customized Cash Rewards and Citi’s Custom Cash), also include travel in their selection.

As cards with up to 5 or more categories with elevated earnings grow in popularity, consumers increasingly turned to Affiliates to better understand the complex offerings and choose the credit card that fits their lifestyle the best.

Affiliate sites no longer offer just ratings and lists of top cards - many publish articles and blog posts reviewing cards, comparing features and offerings against each other, and even providing recommendations based on a consumer’s spending habits. Many consumers apply for credit cards through Affiliates, a trend emphasized for tiered rewards cards where the number of people applying for a credit card from an affiliate link grew by 45% between 2021 and 2023 (more than 1.5x the growth rate for all consumer brand cards).

Affiliate sites provide direct links for applications for many cards, some leading directly to the online application, while others taking shoppers to the card page on issuer’s site. This simplifies the application process by enabling consumers to learn more about the cards on the Affiliate pages and then directly apply.

Key Takeaways

This trend of consumers increasingly selecting cards that offer more complex earning structures, with multiple spend categories that emerged over the last 2 years continues to hold true as we look at more recent data from the beginning of 2024. In fact, cards that offer high earnings in all the highlighted categories have more than doubled the growth rate of other Rewards cards in Q1’24 compared to Q1’23. We expect this trend to continue as these categories have strong momentum moving into the rest of the year. We’re keeping a close eye on the role of affiliate sites as well, where consumers can easily be sold on the value of these rewards. Get in touch with us here to talk more about which specific credit cards are performing best or if you would like to learn more about other credit card segments.