Less Rewarding Credit Card Rewards

by Brian Johnson on March 10, 2009

wb_rewardsRewards programs have been used to lure in customers, but with the credit card crisis, the value of those rewards is being altered.  According to a letter that Citibank sent out to its customers, as of March 1, 2009, “ThankYou Network may be revised in a manner that may affect your ability to use the ThankYou Points you have already accumulated.” More specifically, “20,000 Thank You points used to get you a $250 gift card and now they only get you a $200 gift card” says Heather Stockburger, a Citibank credit card customer. This backpedaling and manipulation of the value of reward reinforces what Card Hub (owned by the same company as this blog) has been saying for some time:  cards with cash-back programs are better than mileage or points rewards cards because they give you what you earn as you go and do not store up your earnings in points systems that can be changed by the card issuer.

Citibank is not alone in altering their points system.  Reports from multiple sources now suggest that the rewards point systems are changing on cards issued by Chase, Discover, and American Express.  With these companies altering their points and miles rewards, membership is becoming significantly less rewarding. 

Our advice is simple:  given that rewards cards often carry higher interests rates, make sure that if you use these cards, you should pay off the balance every month.  If you pay your balance in full, you should use a cashback credit card.  Otherwise, with these changes, it is even more important that you should focus on interest rates rather than the promise of rewards.

Discussion

Coolhandluke
The site www.slickbudget.com points out quite a few good options for credit cards. There are some sweet deals there as well. The guy saves families thousands and he does it for free.
July 13 at 12:08 pm

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