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Spend Your Credit Card Points ASAP

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The Wall Street Journal published an article last week that I was surprised I didn’t hear about – Banks Make Rewards Plans Less Rewarding. It covered, among other things, how credit card issuers have been playing with their reward plans to reduce their liability. In other words, they’re making the points you’ve already earned worth less and less, so they have to payout less and less in rewards!

If you’re a Citibank Thank You Rewards member, the name of Citi’s reward program, then expect to see your points worth a little bit less. At the moment, it only costs 20,000 Thank You points for a domestic coach airline ticket worth up to $400. On March 1st, you will convert points on a 100 points to $1 value, meaning a $400 ticket will cost you 40,000 points. They’re not the only one though, every credit card issuer is making changes. Some are changing their sign up promotions, others are playing with their points conversion schedule, but they’re all doing something.

Here’s the WSJ’s recap:
WSJ Recap of Program Changes

There are two lessons:

  1. Try to get a cashback card, rather than a points card. Points you have to accumulate until you get enough to convert it into something, cash is cash.
  2. Spend your points ASAP because as card issuers feel the pressure, they’ll start finding “invisible” ways like this to boost profits. It’s like how airlines had baggage fees, it was “invisible” because it didn’t happen at the point of sale, it happened much later after you were committed. By reducing the value of points, you don’t have much of a choice anymore because you’ve already earned the points. Is it dirty? Maybe, but that’s business.

Check out the article, it goes into a bunch of other issuers and into greater detail.

{ 13 comments, please add your thoughts now! }

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13 Responses to “Spend Your Credit Card Points ASAP”

  1. Flexo says:

    The era of taking advantage of credit cards for their rewards is coming to an end… at least until the economy’s better, banks are thriving, and competition for new customers, particularly those who fall into credit traps, is fierce.

  2. I’m happy that it doesn’t seem to affect the Chase card that I’ve had for some time (pre-dates the Freedom card). It still earns me 5% on groceries, gas, and drugstores. It will be a sad day if/when that goes away.

  3. dre007 says:

    i was wondering why did the government send out stimulas checks then at the end of the year when filing taxes you have to repay the entire amount. what is the purpose of the sitmulas check to put us in further debt. what if i didnt want an stimulas check this year what would i have to do.

  4. Patrick says:

    I have a Chase card too and I’m with Lazy Man that I’m glad they aren’t affecting the rewards I am earning. It looks like they are only reducing the rewards for new customers.

    I just don’t get the point of getting a points rewards over a cash rewards. The cash rewards always seem better and you can always buy the same item with the cash.

  5. Start-Up says:

    I agree with cash rewards cards, because they can’t take your cash away once you’ve earned it. I’m going to have to monitor my capital one rewards card to see if they plan on making any changes. If I don’t average one free trip to boston a year, the card isn’t worth using anymore. I will keep it alive for credit score reasons though as it’s my longest active card.

  6. MoneyNing says:

    Hmm. I’ve had to use a $100 to 1 point system for my thank you network for ages since I had to book through expedia within the system and I can cross check the actual price.

    Maybe different cards have different programs even if they all use the thank you network?

    • Eric N. says:

      They’re all the same. Jim is referring to the fixed flight redemption rather than the variable redemption that you probably did through Expedia.

      This really, really sucks though since I’m close to 20,000 TY points but I don’t think I’ll make it before March. I guess I have to settle for those $100 gift cards. :(

  7. fathersez says:

    I have always had a points card. The points have built up quite a lot. Last December my wife and I went to see what we could redeem. It was quite a pittance.

    A friend has advised me to just transfer the points to my FF program.

    Still it looks worthwhile to explore a cash back card now.

  8. It is disheartening that it has become apparent that you can’t rely on credit card companies to necessarily maintain their programs at a certain level long enough for you to accumulate points for top rewards. Its not fun to save points for months and years and find that you can’t really get anything when you finally amass enough of them.

    In my own case, I am particularly sad about the death of the Fixed Flight option with the Citi ThankYou network — if travel is your thing, that provided unparalleled value. The ThankYou network will be a lot less attractive after March 1.

  9. BrewCrewFan says:

    I’ve heard on the PF forum on the Wall Street Journal that Chase has confiscated cash rewards of BP Visa users if Chase suspected (but not confirmed) that the cardholder was using the card for commercial use. Some people lost close to $1,000 in banked rewards.

    http://www.filife.com/reviews/chase-bp-visa-credit-card

    I have always redeemed my rewards as soon as I hit the minimum threashold ($25)

  10. Anonymous says:

    They’re all the same. Jim is referring to the fixed flight redemption rather than the variable redemption that you probably did through Expedia.

    This really, really sucks though since I’m close to 20,000 TY points but I don’t think I’ll make it before March. I guess I have to settle for those $100 gift cards.

    sooooo go f%^&%^& your self u B!@#%$&*()

  11. Mike says:

    Comments cover a three-year period and no date on the article. MARCH OF WHAT YEAR?????


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