Recent program changes provide increased reward flexibility…
More and more people are choosing reward credit cards. Many savvy consumers use reward cards to shop and earn extra perks, targeting specific locations (such as grocery stores and gas stations) to maximize the rewards they can earn. Because of this, credit card issuers are looking for new ways to build customer loyalty by introducing more reward flexibility and offering additional bonuses in more places. Here are some recent changes:
Capital One Financial, Corp
Capital One is offering a new online service at www.captialone.com/cardlab that lets consumers create their own card. Choose from a menu of options including the type of reward you want (cash, points, miles), a range of interest rate and introductory offers, repayment rates and cashback options. Customers cannot choose all of the best features, but will have to trade off between those features that are most important to them and lesser features.
J.P. Morgan Chase Card Services
Chase is offering rewards across an expanded range of categories from 3 to 15 and is ending the requirement that you need to shop at specific merchants to receive rewards. For example, the Chase Freedom Card automatically rewards consumers 3% cash back or triple reward points on purchases in the three retail categories in which they spent the most each month, such as groceries, gasoline and restaurants. The Freedom card also pays a higher reward depending on an individual’s spending habits.
Discover Financial Services
The Discover More Card, which recently replaced the Discover Platinum card, offers customers the opportunity to earn 5% cash back bonus in categories that are rotated by the company quarterly. Discover plans to drop merchant-specific requirements next year so users can shop at any store within those categories to earn the 5% cash-back bonus.
The Downside to New Changes
Although the recent changes seem great on the surface, be aware that some issuers have lowered the overall amount of rewards you can earn. Restrictions have also been added that limit how much users can spend to earn the best perks. For example, the Discover More card will only allow up to $100 monthly (down from $125) from the four categories offering 5% cash back. The Chase Freedom card (offering 3% cash back) is now lower than the recently discontinued Chase Cash Plus program that provided a generous 5% on select purchases.
In an ever changing world of rewards, it’s important to determine how you’ll use your credit card month-to-month so you know which reward program is best. Not all features will benefit everyone; likewise, restrictions may not limit you depending on how you use your card. Always shop around and compare before you decide!
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