One of my friends absolutely loves his Penn State-branded American Express card (I think it’s a “skinned” AMEX Blue card) because he gets to earn “points” towards various Penn State-related products and services. An example is the annual Alumni Association Annual Membership which is available for 7,100 points. Sometimes I think he gets amped up seeing Joepa on the face of the card. 🙂
It made me wonder whether these types of loyalty credit cards are worth it. The ones that most immediately come to mind are the gas station credit cards where you get higher cash back or reward points when you use it at their gas station.
Brand Loyalty Cards
Let’s use the BP Visa Card  as an example, here is the cash back schedule:
- 5% rebates on all BP location purchases
- 2% rebates on all eligible travel and dining purchases
- 1% rebates on all other eligible purchases
Except for the 2% on eligible travel and dining, the schedule matches what you would expect from a gas station reward card. You get 5% at their gas stations and 1% everywhere else. This is a good deal if you always buy gas from BP, it’s a less good deal if you don’t.
There’s a reason why they’re called loyalty cards – they reward brand loyalty. In the case of gasoline, where you have a commodity good, where the differences between each brand’s product is very small, loyalty cards aren’t as good because you may end up paying more than you should for something. Gasoline is the best example of this because if you see one gas station, chances are another will be right across the street.
Brand-Agnostic Affinity Cards
Then you have the case of my friend who has his Penn State branded card where he’s rewarded points based strictly on how much he spends, not where he spends. With brand-agnostic affinity cards, you have to review the catalog to see whether it’s financially prudent.
When I reviewed the Citi Thank You Network reward catalog , American Express Membership Rewards catalog , and Discover Cashback reward catalog , I found that the three were very different. You need to review the catalog yourself to find out the cash-equivalent value of the points to see what makes the most sense.
Do you use a brand affinity card or brand-agnostic card? If so, what card and why? Do you find it’s worth it or too much hassle? Has it affected your buying behavior?