Source: d3sign/Moment via Getty images.
Credit is an essential part of the modern economy, but access to credit is not distributed evenly. Credit cards are often the easiest route for most households to build credit and the financial flexibility it affords. However, all credit cards are not created equal. Cards with annual fees usually offer premium benefits along with the added cost. Yet many households, especially lower-income ones, don’t appear to value those benefits enough to accept the annual fee.
This blog post presents findings from a first-quarter 2025 survey conducted by 451 Research from S&P Global Energy Horizons and focuses on top credit card perks and overall usage trends.
Summary of findings
Majority of respondents have multiple credit cards. The importance of credit is evident in the 83% of respondents who say they currently hold two or more credit cards, with the largest single group holding four or more cards (39%). There are stark differences across income groups, with higher-income households (more than $125,000 per year; 95%) far outpacing lower-income ones (less than $75,000 per year; 65%) as multi-card holders. The fact that such a large percentage of lower-income households have multiple credit cards illustrates the importance of credit availability.
Cards with annual fees are valued mainly by higher-income households. While there is a certain amount of ubiquity surrounding the general use of credit cards, 71% of higher-income households use cards with annual fees compared with just 34% of lower-income ones. But even with strong usage among higher-income households, the majority (55%) carry only one or two credit cards with an annual fee. That being said, this difference in usage across income groups clearly grants perks and benefits to higher-income households that many lower-income ones aren’t able to access without paying these fees.
Travel perks still resonate most with consumers. Among respondents who hold at least one credit card with an annual fee, travel perks remain the most important feature. Specifically, travel-related perks like airport lounge access, elite memberships and frequent flier programs are enjoyed by 49% of this group. This is followed closely by enhanced travel protection (40%) such as trip insurance, rental coverage and roadside assistance. These perks are noticeably more popular than the next tier of features, which includes relaxed spending limits (23%), credit toward subscriptions/fees (23%) and annual airline companion fares (23%). However, 68% of consumers point out that they would cancel a card if their annual fee amount went up, and 65% would do so if benefits were reduced.
Satisfaction and cost are key reasons for avoiding annual fee credit cards. Overall, the top reasons for not holding credit cards with annual fees are satisfaction with no-fee credit cards (52%) and extra benefits not justifying the extra cost (35%). Looking at the income breakout, satisfaction with no-fee cards (54% lower-income versus 43% higher-income) and the annual fee being too high (15% lower-income versus 5% higher-income) are cited more often by lower-income households compared with higher-income ones. Meanwhile, higher-income households (49%) are more likely to say the extra benefits don’t justify the extra cost compared with lower-income ones (26%).
Cash remains king. Looking more broadly at users of no-annual fee credit cards, cash-back rewards on all purchases (50%) remains the most important feature along with simply having no annual fee (50%). Fraud protection (38%) is also highly valued, as are cash-back rewards on specific spending categories (23%).
Big banks lead in credit card usage. Citi (15%) and Chase (15%) are the credit card brands used most frequently by respondents, followed by American Express (9%), Bank of America (9%), and Capital One (8%). Almost one-quarter (23%) of respondents selected “other.” This likely represents a large chunk of other Visa and Mastercard branded cards that are issued in conjunction with smaller banks.
The Smart Home Era is Here
Want insights on fintech trends delivered to your inbox? Join the 451 Alliance.
