The End of Credit Card Rewards?

An article on CNN Money seems to imply that Credit Card rewards programs will be decreasing. I mentioned at the beginning of the month that American Express would be changing their reward program. This may be a sign of things to come; it’s possible that more card companies will follow suit.

Today’s article says programs that award customers with “points” that can be redeemed for items through a catalog, like the one American Express offers, are being scaled back while the more popular cash-back reward programs are getting attention from the companies.

While the frequent flier reward cards may be a better deal, it’s not appropriate for people who don’t fly often or who don’t charge enough to qualify for the rewards. A domestic flight might require $25,000 in charges a year, which is above what I put on my credit card, and I would think that it’s higher that most other people’s activity as well.

Here are a few questions to ask before you commit yourself to cash-back cards. “My card” is aCitiBank Dividend Platinum Select card, which I’ve had since switching from CitiBank’s Upromise card.

• How much do you have to charge annually to qualify for any cash back? My card has no minimum charge amount and the cash back is calculated and accrued each month.
  
• What is the yearly cash back limit? My card has a $300 yearly limit.
  
• How do you redeem your cash? I can easily request a check to be sent to me via CitiBank’s website.

Those are the only questions provided by the article, but here are some more you should consider.

• Is the cash back calculated as a percentage of your statement activity or your carried-over balance? If you pay your credit card balance in full every month like I do, you may receive no benefits depending on the program. My card pays on the statement activity, regardless of payments I make.
  
• Do they follow their own rules? If the program breaks down its rebate amounts based on type of merchandise or service (for example, 5% cash back for gas, 2% for restaurants and groceries, 1% for everything else), the vendor must identify itself to the credit card company as such. This doesn’t always happen, so to make the most out of these programs, you must track your rewards and call the credit card’s customer service if you’re not receiving what you believe you should.