Nearly 200 million Americans have credit cards, according to Statistic Brain Research Institute. How people use them and what kinds of cards they use vary, however.
GOBankingRates surveyed more than 2,000 Americans about their credit card behaviors and preferences, asking the following questions:
How many credit cards do you have?
What type(s) of credit cards do you own?
How much debt do you have on your credit card(s) combined?
What is the No. 1 feature you look for in a credit card?
When it comes to your credit card habits, how do you stack up to the rest of the country? Click through to find out what Americans look for in a credit card and how much debt Americans really have.
1 Out of 3 Americans Really Love This Type of Credit Card
With so many different types of credit cards on the market, it can be hard to decide which one to choose. The most popular credit card types include:
Balance-transfer credit card: Allows you to transfer high-interest credit card balances to a card with lower interest to help pay off debt faster
Cash-back credit card: Pays you back a percentage of your purchases in the form of a cash rebate
Retail/store credit card: Gives you various rewards for making purchases of retail goods
Secured credit card: Requires a security deposit to open; good for people who are trying to rebuild their credit
Standard non-reward credit card: Traditional credit card that offers no rebates or rewards
Travel rewards credit card: Offers travel-related rewards, such as airline miles
However, despite the many options, nearly 35 percent of respondents stated that they owned a cash-back credit card, making it the most popular type. Twenty-five percent of respondents have a standard non-reward credit card, 23 percent have a retail/store credit card, 20 percent have a travel rewards credit card, 14 percent have a secured credit card and nearly 9 percent have a balance-transfer credit card.
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Gen X Wants Travel Rewards, Seniors Want Cash Back
In the study, cash-back credit cards were the most popular across all age groups, but the popularity of other types of cards varied by age.
Although 17 percent of seniors have secured credit cards, a high percentage of millennials ages 25 to 34 also have secured credit cards, with nearly 16 percent of respondents in that age group stating they have a secured credit card. People with poor credit usually open secured credit cards, and many millennials fit this bill.
A previous study found that 43 percent of millennials have subprime credit, carrying a VantageScore of 600 or lower, compared to only 30 percent of all credit-active adults. Millennials also had the most balance-transfer credit cards, with 12 percent owning these types of cards.
A higher percentage of seniors (age 65-plus) have cash-back credit cards and retail/store credit cards than the other age groups, with 42 percent owning a cash-back card and nearly 29 percent possessing a retail/store credit card.
Among Gen X respondents aged 35 to 44, travel rewards cards were more popular compared with the other age groups, with 25 percent using these types of cards to earn rewards on flights, hotels and other travel expenses.
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Men and Women Want Different Types of Credit Cards
Both men and women prefer cash-back credit cards, with 36 percent of men and 34 percent of women saying they have such a card. But other preferences varied by gender.
Retail/store credit cards were more popular with women, with 27 percent of women owning this type of card, while only 19 percent of men have one. More men favored travel rewards credit cards than women: 24 percent of male respondents said they own a travel rewards card, while only 17 percent of women said they did.
Men were more likely to have balance-transfer credit cards, with 10 percent of the surveyed men owning one, and only 8 percent of surveyed women owning one. A separate GOBankingRates survey found that men have three times more debt than women, so it makes sense that men would opt for credit cards that help consolidate debt more than women do.
How to Pick the Right Credit Card
Every type of credit card has its pros and cons, so it’s important to understand which works the best for your financial status and needs.
Balance-transfer credit cards can help pay off your debt but don’t usually come with rewards.
Cash-back credit cards give you a rebate on your everyday spending, but they tend to have higher annual percentage rates (APR) than cards without cash-back rewards. APR is the interest you pay on purchases you make with the credit card and don’t pay off before the grace period ends.
Retail and store cards also give you rewards points for spending, but point values might end up being less than dollar values. If you have a balance on your card, you can end up paying more in interest than you are getting back in rewards.
When it comes to travel rewards credit cards, make sure you pay attention to annual fees, which can be as high as $450. If you don’t travel much, the fees might not be worth it.
Secured credit cards require you to provide a security deposit, which you will lose if you don’t pay your bill. However, if you have poor credit, this might be your only option; you might not get approved for an unsecured credit card.
When choosing a card, make sure to look at the credit card’s features and perks, including rewards, APR, annual and other fees, and sign-up bonuses.
The No. 1 Feature People Want in Their Credit Card Is…
Every credit card comes with its own advantages and perks, but when it comes to choosing a credit card, Americans said that having no annual fee is the feature they value most: nearly one-third of those surveyed opted for no annual fee over cash back, low APR, low (additional) fees, rewards or points, and sign-up bonuses.
An annual fee is a yearly charge that some credit cards require simply for being a credit card holder. Some credit cards justify their fees with perks, such as travel rewards and low APRs, but no annual fee cards can offer similar perks — especially to people with good credit.
The second-most popular choice was rewards or points (21 percent), followed by low APR (20 percent). Respondents cared the least about sign-up bonuses: less than 3 percent opted for that credit card feature.
Men Want Cash Back, Women Want Lower Fees
Men and women agree that no annual fee is the feature they value most in a credit card, but a higher percentage of women than men opted for this feature. Among women, 32 percent of them surveyed said that it’s the No. 1 feature they look for, and only 29 percent of men made that selection. Women also chose low APR and low fees more often than men, while men opted for cash back, rewards or points, and sign-up bonuses more often than women.
Millennials Care About Cash Back More Than Other Age Groups
Different features mattered more to different age groups, though all ages chose no annual fee as the feature they looked for the most. However, seniors chose this feature more often than the other age groups, with 49 percent of seniors who responded stating that this was their No. 1 priority in a credit card.
Millennials from 25 to 34 wanted cash back and sign-up bonuses more than the other age groups, while those 18 to 24 cared the most about low overall fees. Rewards and points were most valued by Gen X respondents.
What Is the Most Important Credit Card Feature?
The most important credit card features depend on your financial status. If you tend to carry a credit card balance, interest rates and fees are important factors to consider when choosing a card. If you are someone who regularly pays the bill in full, perks such as cash back, rewards or points might factor more into how you choose a card, as those cards tend to come with higher APRs.
Sign-up bonuses can seem like an appealing perk, but make sure they outweigh any annual fees. Also, these cards might come with minimum spending thresholds, so avoid signing up if you will end up having to spend more than normal to meet spending requirements. Once again, these cards are not the best choice for people who cannot pay their bill in full each month, as the cards often come with high interest rates.
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Most Americans Have One or Two Credit Cards
The temptation to open new credit cards is something many people confront on a near-daily basis, with retailers pushing their store cards at the register, and new credit card offers flooding our mailboxes. However, 38 percent of Americans surveyed said they only have one credit card. Meanwhile, 22 percent have two credit cards, 16 percent have three, 9 percent have six or more, 8 percent have four and 7 percent have five.
Gen X and Boomers Have the Most Credit Cards
Young millennials are more likely than any other age group to have only one credit card, with 56 percent responding that they only owned one. On the flip side, Gen X and baby boomers are more likely to have six or more credit cards, with 11 percent of 45- to 54-year-olds and 10 percent of 55- to 64-year-olds responding that they had six or more. A separate GOBankingRates study found that these two age groups also have the most debt, while young millennials have the least.
Men vs. Women: Who Carries More Cards?
Nearly an equal percentage of men and women surveyed carried only one card, with 39 percent of females and 35 percent of males responding that they have just one credit card. However, women were more likely than men to have six or more credit cards: 10 percent of females gave this response, while only 9 percent of men did.
How Many Credit Cards Should You Have?
There is no good or bad number of credit cards to have. What matters is your ability to keep all of your credit card balances in a manageable range. You should be able to make more than the minimum payment on all credit cards you use. If you can’t, you probably have too many credit cards, and it might be time to consolidate.
Not keeping up with your payments can make you go into debt, especially as interest begins to mount on unpaid balances. A separate GOBankingRates study found that 50 percent of Americans had credit card debt. Read on to find out just how much credit card debt most Americans have.
The Average American Has Nearly $7,000 in Credit Card Debt
Among the more than 2,000 Americans surveyed by GOBankingRates, the average amount of credit card debt people carried was $6,880.
Vincia Gordon, a client services manager for nonprofit credit counseling provider Guidewell Financial Solutions, previously told GOBankingRates that she believes Americans carry high credit card balances because they’re driven by the need for instant gratification. Consumers think, “Let me just put it on the card. I want it now,” she said, rather than saving up the money to pay for their purchases in full.
Which Generation Has the Most Credit Card Debt?
Baby boomers have much more credit card debt than the other age groups, with the 55 to 64 age group having an average of $9,878 in debt. Millennials ages 25 to 34 followed, with an average of $7,327 in credit card debt. Generation X adults fell in the middle, with 35- to 44-year-olds having an average of $3,382 in credit card debt, and 45- to 54-year-olds having an average of $4,290 in credit card debt. Seniors had an average of $1,755 in credit card debt, while young millennials ages 18 to 24 had the least amount of credit card debt, with an average of $710.
A previous survey found that millennials who are parents often depend on financial support from their baby boomer parents, which could explain why boomers are so heavily in credit card debt, while young millennials have very little.
Men Have More Credit Card Debt Than Women
The women surveyed had an average of $1,980 in credit card debt, while the men surveyed had an average of $6,904 — more than triple the average woman’s debt. This is consistent with the breakdown of overall debt held by each gender. A previous GOBankingRates study found that men have three times more overall debt than women do.
Credit Cards: The Good, the Bad and the Ugly
Credit cards allow us to make purchases large and small without using our cash. However, it’s important to keep in mind that credit cards are not “free money.” If you cannot pay back your lender within 21 to 30 days, you can be hit with interest and fees, which quickly could pile up into debt.
Be sure to make payments on time. And to help keep your balances low and your credit score healthy, only apply for credit cards that are truly beneficial to you.
Methodology: This GOBankingRates.com survey posed the following questions to 2,021 people: (1) How many credit cards do you have? (2) What type(s) of credit cards do you own? (3) How much debt do you have on your credit card(s) combined? (4) What is the No. 1 feature you look for in a credit card? Responses were collected through a Google Consumer Survey conducted from Nov. 1, 2017, to Nov. 3, 2017, and responses are representative of the U.S. online population. The survey has a 5.1 percent margin of error.