Opinion: Why More Credit Card Users Are Choosing Cash Back

By the look of the splashy marketing around card rewards programs, you would think they’re all bigger and better than ever.

Are they really, though?

Consider your own experience. Have annual fees gone up? Has access to airport lounges been restricted for you or your guests? Have the points required for flight or room redemptions risen? Have researching and understanding rewards become so complicated that you often give up partway through or don’t even bother to try?

Those are all forms of devaluation, making it harder or more expensive (usually both) to cash in the rewards you’ve earned.

So, despite how advertising campaigns may be framing it, rewards programs are no longer about easy luxury. Instead they’re more akin to an annoying slog.

Have some sympathy for card issuers, though, because they’ve essentially painted themselves into a corner here. Take airport lounges, for example: They’re a longtime centerpiece of rewards programs for offering a little respite and luxury amid the usual travel chaos.

But in recent years they’ve become overcrowded and noisy, and pretty much like the rest of the airport. When access is extended to virtually anyone, then they’re not exclusive anymore. With everybody and their cousin piling in (just try to find a seat these days), lounges have become increasingly expensive to operate and maintain.

So one response is to cut back on access and make them more exclusive and appealing again by limiting the number of visits, eliminating complimentary guest passes, or requiring a certain amount of spending on your card. Such changes recently affected some Capital One and Chase cardholders, for example.

In other words, some of the perks you used to enjoy, you no longer enjoy. If you now have to spend thousands on your card to earn back those rights, that feels like an obligation, or even a threat.

And if you’re paying more than ever in annual card fees for more restricted benefits, that’s a pretty hard pill to swallow. It can feel like a bond of trust has been broken.

Another sticking point is that redemptions seem to be costing more and more. With in-demand flights or hotel rooms, for instance, you may not even be allowed to cash in rewards at all. Or if you are permitted, it might cost you much more than you are used to.

Those are forms of dynamic pricing, which responds to live trends in the marketplace. So instead of getting a hotel room for a flat 20,000 points, for example, the cost may be tied to what the room is currently going for in cash — and on a popular day, the asking price might now be 40,000 points.

Frequent travelers are used to dynamic pricing by now, so this doesn’t come as much of a surprise. But for longtime customers, that transaction no longer feels like being rewarded for loyalty — it feels a little bit like being held at gunpoint.

It will be fascinating to see how consumers respond to this new era of rewards devaluation. The loyalty of customers who feel disrespected is very much in play, so there could be more movement between cards as they seek out other rewards programs that don’t make things quite so difficult.

Or, if every issuer is now playing the same game, cardholders could come to the conclusion that the cost just isn’t worth it anymore.

Perhaps they shift to easier-to-understand cash-back models, for instance, which don’t obligate them to go searching through coupon books for current brand partners, or calculate semi-annual credits at restaurants they may or may not visit, or sign up for streaming memberships they didn’t want or didn’t ask for.

U.S. Cardholders' Preferred Credit Card Type

Source: CouponFollow Credit Card Rewards Survey, 2025

Consumers aren’t being discreet about this shift, either; they’re voting with their feet. The majority of cardholders (58%) are now using cash-back cards — almost double the percentage of those using points or miles cards, according to one survey.

It’s not hard to figure out why. The rewards are simple to grasp, they’re issued fairly quickly, they don’t lead you into a complicated redemption maze, and the annual fee is typically far lower (even $0).

Smart issuers may recognize what’s happening — perhaps by surveying the sentiments of their own frazzled and tapped-out customers — and go in the opposite direction.

When everything has become so hard, there’s a wide-open lane for a rewards program that makes things easy.