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 think it's basically a case of "why should we keep the benefits?". Once you have a customer base, you can slowly chip away benefits until you see that people are no longer renewing the card. It's typical bean counters trying to squeeze out as much profit as possible. Cards start out generous and get less generous over time as companies want more profit.
Of course, yes, sometimes that corresponds with super generous cards being used by too many people, or abused, or both, but I think sometimes it's just the company being greedy. Either way, it's a pattern for sure.