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The beginning of the end of travel rewards?

The beginning of the end of travel rewards?

Old Jan 5, 19, 7:17 pm
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The beginning of the end of travel rewards?

Rewards Credit Cards Gained Fanatic Following Now Banks Are Pulling Back- WSJ article

Nearly all the banks have severely restricted how many cards/sign-up bonuses customers can get. I know the common reply is that during the next recession, banks will be begging us to come back. I'll believe it when I see it.
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Old Jan 5, 19, 7:45 pm
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Originally Posted by kapooncha View Post
Nearly all the banks have severely restricted how many cards/sign-up bonuses customers can get.
Good news at last!
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Old Jan 5, 19, 7:47 pm
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Originally Posted by mahasamatman View Post
Good news at last!
I've had a good run the last 4-5 years. Going from the front to the back is going to be a tough pill to swallow though.
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Old Jan 6, 19, 6:33 am
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Good. Credit card bonuses are what caused the rampant inflation of mileage awards.
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Old Jan 6, 19, 6:41 am
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Originally Posted by kapooncha View Post
Rewards Credit Cards Gained Fanatic Following Now Banks Are Pulling Back- WSJ article

Nearly all the banks have severely restricted how many cards/sign-up bonuses customers can get. I know the common reply is that during the next recession, banks will be begging us to come back. I'll believe it when I see it.
its good and bad, and you go ahead and believe what these articles say..smh
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Old Jan 6, 19, 6:50 am
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Originally Posted by kapooncha View Post
Rewards Credit Cards Gained Fanatic Following Now Banks Are Pulling Back- WSJ article

Nearly all the banks have severely restricted how many cards/sign-up bonuses customers can get. I know the common reply is that during the next recession, banks will be begging us to come back. I'll believe it when I see it.
No, the banks will not. Same as air carriers will not cut fares. Both cut "capacity."

The myth that unprofitable customers will somehow help the bottom line is dead and gone. When merchants are able to end higher interchange fees for specialized cards, the cost of those cards will fall directly on card issuers (banks) and it is unlikely that the costs of such a card will be worth it.
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Old Jan 6, 19, 7:13 am
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Nice thread title. Why would this be the end of rewards? This seems targeted at the people who make a sport of going through a dozen cards per year and devaluing the ideas of brand loyalty, earning with legitimate spend, and having banks compete for customers.
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Old Jan 6, 19, 7:18 am
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Had an interesting conversation a few months back who was one of the initial team that started creditcards.com and is still very active in the banking CC rewards space. High credit score/high use customers are still incredibly valuable to the banks and they're going to continue to target them. It's the second prong of this that I think will end up being hit much harder--the use side. To an extent this is already being done--min spends are now in the 3-4K range while a few years ago $500 spends were more common. My guess is that the same pot of money for rewards will end up being allocated to sign up bonuses that are more like the Chase Marriott 10:1 up to 120K points over a 12 month period from last year and/or to one like I got on my Amex Biz Rewards Gold in Q4 2018 of 50K Membership Rewards points for 10K in spend over 3 months. On offers like these, even if they re being "gamed", the swipe fees are probably worth it to the banks.
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Old Jan 6, 19, 3:46 pm
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Originally Posted by kapooncha View Post
I know the common reply is that during the next recession, banks will be begging us to come back.
I doubt that will happen. The clamp-down on the churners is a result of them being money-losing customers: someone that signs up for a card with a bonus and first-year fee waiver, meets the minimum-spend requirement, then abandons the card is a money-loser for the bank. A recession isn't going to make the banks say "Gee, the economy is down - what we really need to do is beg those money-losing customers to come back!"
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Old Jan 6, 19, 5:43 pm
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Originally Posted by kapooncha View Post
The beginning of the end of travel rewards?
No, first of all, it would be the beginning of the end of the travel rewards earned through credit card churning! This has nothing to do with other types of travel rewards earning.

Second, I'll believe that when I stop posts from people saying they're 33/24 or "LOL/24". If it had really cramped down that much, you'd think there's be very few of those people left applying for more than a dozen cards every year.

Plus, each bank has its loopholes, so those have to end first, don't they? Chase's 5/24 doesn't count business cards (because they only look at personal credit reports). Citi mailers generally don't have 24-month language, so you can apply for them about as fast as you get them (and people have figured out how to get them really quickly). Amex's once-in-a-lifetime policy does not apply to upgrades that give bonuses nor to certain targeted signup offers with bonuses.

And then there are those people who don;t churn but instead MS like there's no tomorrow. But eliminating that option completely would take separate actions on completely separate fronts (from anti-churning actions).
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Old Jan 7, 19, 2:54 pm
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Originally Posted by Often1 View Post
When merchants are able to end higher interchange fees for specialized cards, the cost of those cards will fall directly on card issuers (banks) and it is unlikely that the costs of such a card will be worth it.
Any significant caps on interchange will likely have to be government mandated and I don't see that happening any time soon. As it is, nowhere near as many merchants are surcharging and imposing minimums on credit card use as one would expect given how much they supposedly dislike accepting them.
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Old Jan 8, 19, 8:56 am
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Originally Posted by Often1 View Post
No, the banks will not. Same as air carriers will not cut fares. Both cut "capacity."

The myth that unprofitable customers will somehow help the bottom line is dead and gone. When merchants are able to end higher interchange fees for specialized cards, the cost of those cards will fall directly on card issuers (banks) and it is unlikely that the costs of such a card will be worth it.
The two are hardly equivalent. Banks can more easily shed unprofitable customers, while airlines, due to their massive fixed costs, need to make more of an effort to retain marginally profitable customers while they adjust (which can take years) even if those customers are unprofitable in the long term.
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Old Jan 8, 19, 9:42 am
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On the airline and hotel side, the programs originally thrived on information arbitrage. Long ago, if I was on a plane of 100 people, I might be the only one collecting the miles and thinking of using them for a long-haul F award. 50 people didn't know the miles existed, 25 knew they existed but didn't know how to use them, and 24 redeemed the miles for coach tickets to Orlando. The other 99 people were paying for the program, but I was the only one really using it well. (OK, extreme example, but you get the point.)

I also remember checking into a Marriott with minimal if any status, getting a suite upgrade, and being told I was the only Marriott Marquis member in the hotel that night.

Today, everybody is aware of the programs. More people pay attention to their points and miles. There is still some breakage, but now even relative travel novices know the game is to milk a few credit cards and then go for the F/J awards on partner airlines. The Internet has completely covered this.

In the end, I don't think the programs will die. I just think more and more programs will morph to Southwest-style rebate programs. (Many are already there on the earning side.) The aspirational award - the true F experience on the world's best carriers - will become ever more elusive. In the hotel space, Hilton is already going this way. The death of Starwood as a high-experience aspirational program will eventually fast-track the whole industry this way.
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Old Jan 8, 19, 1:40 pm
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Old Jan 8, 19, 2:37 pm
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LOL at the tax one. I remember that one.
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