Better Credit Living

Here is why you will not be enjoying the full benefits of from your credit card reword program ant time sooner. Note that you are now required to pay more or earn additional points to claim free plane tickets or claim cash back perks. Customers are being forced to tighten their belts because the focus is now Turing away from them to the banks. That is to mean, more benefits is shifting to the bank at the disadvantage of the card holders.

To prove this, here is what most companies have done in the resent past in relation to their credit card holding customers. The Alaskan airline intends to eliminate a 2000 free anniversary mile that it has been granting on annual basis to its card holders. American express has increased the fee customers in membership reward program pay. Discover has equally eliminated one of the three tiers in its cash back program. Further on, city has doubled the total number of points that one has to have in order to redeem a domestic roundtrip airline ticket.

These changes have been characterized by the fact that should the new law take effect, banks will have limited ability to set interest rates and fees based on individual borrowers’ risk. Further more, lending money will become an expensive exercise and the banks will be forced to withhold credit. New customers will be charged high rates while at the same time the annual fee will increase.
Credit card rewards programs have been aimed at enticing new customers and have been used by most companies as a form of expanding their market share. Back in the days, companies competed to provide attractive rewards and in return people opened up to the receiving end with a majority of people ending up with multiple cards just because of the reward.

With more card holders not being able to settle their bills, companies are reluctant to show off attractive rewards anyhow unless you are a credit worthy customer. Therefore to counter the poor payment pattern by most customers companies are imposing penalties on the reward offers they have. Here are some examples. For American express blue card customers who make late payment are entitled to loose the points they earned over that given month.

While other companies are cutting down on reward programs, some such as chase are still good at the game and are rewarding their customers diligently. With its programs such as ultimate rewards, customers earn a point per dollar spent without earning caps or expiration dated.

The era and age of credit card rewards is here to stay and with time, it will be picked back up and used as have been the case. However, the benefits offered will be on a sequential increase and decrease for all income classes. With the new law taking shape, the credit card reward program is likely to suffer especially for moderate and lower income earners. Finally you’re advised to always inspect terms and conditions as notices of change are never labeled clearly.

This entry is filed under Bureau, Living.