Originally Posted by
pinniped
FF miles and hotel points aren't much different. I agree to consolidate my business travel with one vendor, and I get a nice personal kickback for doing so. It doesn't matter whether another vendor has a cheaper flight or room. Once I'm on the "status train", I'm not getting off.
Nail on the head ^. That is exactly why banks are doing it as well. Although we all would never -ever- have a late payment or leave a balance on a card, the banks are confident that one or two of us will slip up. All they need is you to do it once and they likely break even, twice and they start making money.