Over the last two weeks, I’ve received several notices from some of my favorite cards that their program terms are changing. Many times I don’t read these notices, but these were different – they were changing the terms to my rewards programs!
First, American Express lowered its rewards on dining from 3% to 2%. I was kind of sad, but they made up for it with a $25 giftcard and an apology. Then, USAA announced that it was ending its Rewards Debit Card program. I didn’t use this very much as well, but it was still a second rewards program to fall in a week.
Why Companies Are Ending Their Rewards Programs
Both of these programs ended on the same note: ” Due to new federal laws that affect the banking industry, we have had to reevaluate our rewards benefits. Due to the significant reduction in revenue these laws have caused, we feel that this is currently our best option to balance continuing benefits with profitability”.
Both of these program changes are the result of legislation passed to reform banking and reduce fees charged to both individuals and merchants.
Its a Sad Day For The “Bang For The Buck” Consumers
It is sad, because I’m a casualty of laws meant to protect me from something that I never have been nor would be a victim of – high fees. I have done my diligence and selected financial institutions that have great fees and rewards. I consider myself to be a “Bang for the Buck” consumer – always trying to get the most I can for the least amount possible.
Readers, what are your thoughts? Are credit card rewards going the way of the free item in a cereal box? Does it bother you that it is forced by a side-effect of legislation?
|
Share the Love
|
Get Free Updates
|
This post was written by...
Robert – who has written 317 posts on The College Investor.
Robert is the founder and editor of The College Investor, a personal finance site dedicated to young adult and college student finances. You can learn more about him here and connect with him on Twitter or Facebook.
{ 13 comments… read them below or add one }
I believe the “new federal laws” refers to the re-regulation of the finance industry.
I’m actually fine with it. $0.44 average for each swipe in debit card fees? C’mon!
Banks have gotten fat and greedy. Some regulation is good.
You know, it is expensive – but it is a fixed cost that is well known, and businesses can price accordingly. Sell online? You have the same type of fee from PayPal.
I haven’t heard much of this trickeling into Canada yet and I must say I hope it doesn’t. We use our credit cards for all of our purchases to get rewards and then we pay them off at the end of the month. I must say that the amount of plane tickets etc. we have gotten from them have been well worth it.
Interesting how it is really driven by US legislation…irritating at the same time!
Amex cut our rewards too. Gas went from 5% cash back to 4% (or maybe 3%) I know our dining out cash back was 3%, maybe it’s 2% now and I missed the letter. I should check. It stinks.
I noticed on my favorite Chase Visa that it takes more shopping to qualify for the same number of rewards. It stinks!
So far my rewards card hasn’t been hit, so hope that continues to be the case. I’ve heard about other rewards ending, but doubt they are likely to go the way of the free prize in the cereal box.
Heh heh, I don’t really care much about the reward deduction because we use mostly cash these days.
Rewards and rebates are the reasons why we are using our credit cards more often than we’re supposed to.
We’ve taken some huge discounts on one of the travels when we claim the. But if they are going away, then we may have to limit the use of the cards.
I know that I use cards because of the rewards. I pay in full each month, and rack up the money. I think there will always be rewards, but it will be tougher to find cards with good ones!
Credit card rewards are so much better in the U.S. than in Canada. In Canada the best there is is 1.25% cash back from walmart mastercard.
I have been expecting the rewards to decrease because of the new law, I also expect to loose my high yield checking. I am disappointed because I like having that money but it just forces me to look around for other ways to earn income.