Credit card companies are trying to earn your loyalty…
It’s sound advise to open and read every piece of mail from your credit card company. What may come as a surprise is that it’s not always bad news. In fact, millions of consumers are receiving great news about increased reward perks. To improve customer loyalty, credit card companies are using reward programs as a way to make up for the losses from recently enacted legislation. Consumers are more likely to use their cards for bigger rewards and lenders will receive more from interchange fees (between 1 and 2.2% of each transaction). Another possible reason for the increased rewards may be the shift from credit cards to debit cards, which generate smaller fees. Nilson reports that credit card use fell by 11% to $1.92 trillion, while debit use increased 7%.
JP Morgan Chase, CitiBank and American Express are offering ways for their customers who stay current on their accounts to reap new or higher rewards. The Citi and Chase miles reward programs have increased the number of miles earned from 1.2 miles and 1.25 miles, respectfully for every dollar spent on certain airlines. In addition, Chase Freedom cardholders will earn bigger payouts on certain types of purchases, including their Marriott branded cards, with some categories earning 5%, up from 3%.
Unlike Citi or Chase who reconfigured an existing program, American Express has announced a new program. The 2010 Member Project rewards 500 bonus points for every volunteer hour logged. This program encourages everyone, whether an American Express® Cardmember or not, to do their part by providing numerous ways to get involved, including sharing their passion for worthy causes. Whether it’s volunteering for a local organization, making a donation or voting for a charity to receive additional funding from American Express, Members Project will provide the tools and resources to support the diverse causes people care about most and help empower everyone to be successful at making a difference.
On the whole, rewards cards are a sound alternative to standard credit cards, but consumers should expect further changes to reward card programs.
* Be sure to see a complete list of our Reward Credit Cards >