Originally Posted by
josephstern
As far as usage of credit card fee rebates and privileges:
On the one hand, we all know of friends and family who recognize the benefits of a card, get it, and use the benefits for a bit of time, and then forget, their patterns change, the card changes, and the person is just too inertial to get over the hump of getting a new card, moving over the automated charges, setting it up with a new bank account, learning a new online statement format, etc. Credit card providers know that customers are sticky in this regard (like changing cell companies or insurance carriers or TV providers).
On the other hand, good benefits on good cards typically erode. The CSP lost it's 7% rebate, it's extra first Friday points, etc. Prestige is losing some lounge, changing the 4th night, no golf, etc. Platinum has been decimated in tons of ways. So that says that these providers are paying attention, and that enough customers are using the benefits to cost them real money. If the benefit users were only a small percentage of the customer base, they wouldn't bother changing the benefits because they could amortize the costs over the whole base including the non-users.
So I surmise from this that the average customer (from us super-users to those who use virtually no benefits) is costing these companies real money.
I see your point but I don't necessarily agree. While I think that a good amount of people on FT and other sites cause the banks to lose money, I still stand by my idea that the banks are still making money off of the majority of credit card users.
For some small things being taken away, it could very possibly be that they were losing money. But on the other hand, there could be outside things in play that you aren't taking into consideration.
Look at Prestige's loss of AA lounge access, for example. Isn't it a bit suspicious that it happened right after their renegotiation with AA? That could very well have been driven by AA and their addition of Barclays cards, among other reasons. Same goes for the other cuts on AA benefits.
Not saying Prestige wasn't too rich...just saying that there are so many external reasons that may cause a change - not always the small percentage of customers who game the system.