The Electronic Payments Coalition recently released a report highlighting the significance of credit card rewards for American consumers, particularly those in lower-income households. According to the study, credit card reward programs play a crucial role in helping individuals across all income levels manage their finances.

EPC Executive Chairman Richard Hunt emphasized the importance of cashback rewards for financially vulnerable households, stating, "Americans of all incomes take advantage of credit card reward programs but the most financially vulnerable households depend on cashback rewards to help make ends meet."

The research revealed that while all accountholders prefer cashback rewards, lower- to moderate-income (LMI) accounts show a stronger preference for cash, especially during peak shopping seasons. The study found that the rewards earned by LMI cardholders can provide significant savings, with the boost represented through rewards being three to four times larger for LMI cardholders compared to higher-income cardholders. In fact, rewards earned by LMI cardholders could amount to a 17-cent per gallon annual discount at the gas pump.

Moreover, the report highlighted that rewards earned through credit card usage can help offset price increases, providing a tangible benefit to cardholders. On the other hand, cash and debit card users miss out on potential savings generated through cashback rewards.

The study also debunked the misconception that credit card reward programs primarily benefit the wealthy, emphasizing that hardworking Americans rely on these rewards to manage their daily finances. Hunt added, "Saying credit card reward programs only help the rich or are just about getting lounge access at the airport is nothing more than willingly ignoring the full picture."

Additionally, the report addressed concerns about merchants passing on card acceptance costs to consumers and highlighted the net benefit to merchants from accepting credit cards. It also refuted claims that large retailers lower prices in response to debit card interchange reductions, pointing out that savings are not always passed on to customers.

In conclusion, the study underscored the importance of credit card rewards for lower-income consumers, noting that the share of rewards cards owned by LMI households has been steadily increasing. The findings indicate that LMI, middle-income, and upper-income cardholders have similar access to rewards cards and earn rewards at comparable rates.

Overall, the EPC study sheds light on the critical role that credit card rewards play in the financial well-being of individuals across various income levels, emphasizing the need to recognize the value of these programs in supporting households, especially those facing economic challenges.