(New York, NY) Cardholders consider many factors when applying for a new credit card, with those offering no annual fees and attractive rewards structures being the most influential. Auriemma Group’s latest issue of Cardbeat US confirms that offering compelling rewards significantly impacts cardholder decisions, with a clear preference for flat cashback structures over tiered options. The simplicity and predictability of flat cashback resonates strongly with today’s applicants.
(New York, NY) While many cardholders are intrigued by innovative rewards structures, traditional cash back models continue to dominate the credit card landscape. Auriemma Group’s latest issue of Cardbeat US highlights how newer approaches—like increasing rewards with spend or fixed-dollar incentives—can appeal to targeted segments, even as flat and category-based cashback offers remain the most attractive.
Traditional rewards models offer familiarity and clarity, two qualities that consistently drive acquisition. Auriemma’s research finds that 70% of credit cardholders are attracted to high cashback on specific categories, and 67% to flat-rate cashback. By contrast, less conventional options, such as receiving $20 for every $300 spent (58%) or earning more cashback as spend increases (47%), garner moderate but notable interest.
“Simplicity remains paramount even when alternative reward structures offer the richest value proposition,” says Jonathan O'Connor, Senior Manager of Research at Auriemma Group. “The most attractive programs are those that strike the right balance—offering rewards that are not only compelling, but are also clearly understood and easily obtained.”
Who Prefers What? Demographics Shape Rewards Appeal
Interest in newer rewards structures is higher among younger cardholders, urbanites, revolvers, and those with annual household incomes of $75,000 or more, but traditional cashback schemes still come out on top in overall preference. These groups may be drawn to novel programs, but most cardholders favor predictable reward earnings. While high cashback on specific categories is increasingly familiar and attractive, 82% say they prefer consistent flat-rate rewards across all purchases, compared to 61% who prefer higher rates on specific categories—a preference that varies widely by demographic.
Among those traditional options, demographic differences come into sharper focus. Gen Z and Millennial cardholders, those with an annual household income of $75,000 or more, and those who hold multiple credit cards are more likely to favor high cashback on specific spending categories. Meanwhile, their older and lower-income counterparts tend to prefer flat-rate cashback for its simplicity and reliability. These distinctions underscore the importance of aligning card rewards with the values and routines of each audience segment.
“Rewards structures influence not only whether a cardholder applies, but how they’ll use the card once approved,” adds O’Connor. “Understanding these usage patterns is key to building long-term engagement.”
Strategic Implications for Issuers
Though traditional rewards still outperform in overall preference, alternative models present opportunities to reach underserved or overlooked segments. Auriemma’s findings offer three key considerations for issuers evaluating future rewards designs:
- Simplicity is Scalable: Flat-rate rewards are not only easy to market, they also drive consistent usage across categories. These cards can become top-of-wallet options due to their clarity and versatility.
- Framing is Fundamental: Complex reward structures can work when communicated effectively. Issuers looking to try something new should invest in straightforward language and relatable examples that help cardholders grasp the benefit immediately.
- Segment for Success: Younger, urban, and higher-income cardholders are more open to alternative rewards. Targeted messaging and tailored card rewards could lead to conversion.
Together, these strategies point to a clear path forward: one where simplicity and personalization work in tandem to meet the evolving expectations of credit cardholders.
“Cardholders may be open to new ideas, but they’ll ultimately stick with what feels intuitive and rewarding,” says O’Connor. “For issuers, that means crafting offers that don’t just attract but sustain long-term engagement.”
Survey Methodology
The Payments Report
This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in February 2025 among 1,208 adult credit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying.
About Auriemma Group
For 40 years, Auriemma’s mission has been to empower clients with authoritative data and actionable insights. Our team comprises recognized experts in four primary areas: operational effectiveness, consumer research, co-brand partnerships, and corporate finance. Our business intelligence and advisory services give clients access to the data, expertise, and tools they need to navigate an increasingly complex environment and maximize their performance. Auriemma serves the consumer financial services ecosystem from our offices in New York City and London. For more information, call Jaclyn Holmes at (+1) 646-437-6114.