topic Re: Do you think AOD card is here to stay? in Credit Cards

Do you think AOD card is here to stay?

Rockysocks — Thu, 24 Sep 2020 06:56:33 GMT

As the title states, I'm wondering if you all think AOD will alter anything for current card holders? And why? I'm most concerned about a change to the value (to less than 3%). I'm just asking for opinions and gut feelings.

Re: Do you think AOD card is here to stay?

NRB525 — Thu, 24 Sep 2020 07:59:05 GMT

Outliers in the credit card reward space don't last forever. AOD CU is a relatively small CU, and offered a relatively good CC reward structure to their members. The interweb found it, and will eventually drive it back to either within averages for reward earnings, or to re-restricted membership.

there are numerous examples over the last several years of this Flavor of the Month phenomenon.

Re: Do you think AOD card is here to stay?

UpperNwGuy — Thu, 24 Sep 2020 09:53:53 GMT

Study the history of the USAA and Alliant high cash back cards.

Re: Do you think AOD card is here to stay?

Anonymous — Thu, 24 Sep 2020 10:04:20 GMT

@UpperNwGuy wrote:
Study the history of the USAA and Alliant high cash back cards.

Since you mentioned it why not share your insight as this would be a good time to refresh all of us?

Re: Do you think AOD card is here to stay?

kdm31091 — Thu, 24 Sep 2020 10:15:23 GMT

3% with no cap, no annual fee, no balance requirements at the bank, etc... is unsustainable. If they had been geofenced from the beginning and offering it to a fairly small number of members, it probably would be okay as a loss leader to get people into other products. But as an "open to everyone" offering, 3% cards do not tend to last. My guess is either a cap will be imposed and/or the rewards rate will be lowered, or both.

Enjoy it while it's here and move on to something else when it inevitably goes away. As mentioned, these "outlier" cards tend to disappear or be nerfed into just average offerings.

Re: Do you think AOD card is here to stay?

TSlop — Thu, 24 Sep 2020 11:19:08 GMT

@Anonymous wrote:
@UpperNwGuy wrote:
Study the history of the USAA and Alliant high cash back cards.
Since you mentioned it why not share your insight as this would be a good time to refresh all of us?

I just Googled the Alliant card now, and it is now at 2.5% with its $99 AF. I think it was at 3% before, with maybe a boost to 3.5% for the first year? I can't quite recall the 3.5%, but something in my memory thinks it had a boost for the first year. Maybe @UpperNwGuy can give a quick rundown for the sake of this topic.

Re: Do you think AOD card is here to stay?

CreditCuriosity — Thu, 24 Sep 2020 15:30:46 GMT

They are not approving many people anymore so it certainly could stay at a 3% card or like other cards be nerfed or no longer offeredsuch as the limitless. Speculating is just that speculation. Time will be the ultimate factor here in seeing what happens. They have made this card MUCH more difficult to get than when the masses found out about it. If not hugely abused think MS by the people that have it already it will probably live on for quite some time, otherwise a cap or a nerf will be put in place. Regardless still a great card at 7.x apr and 3% as is now, even if they took it to say 2% still be a great card.. Time will tell although as a card holder me being greedy i am glad they tightened up approvals as it is more likely my 3% card will survive!

Re: Do you think AOD card is here to stay?

Anonymous — Thu, 24 Sep 2020 16:34:05 GMT

I think the fate is largely in the hands of the MF members who have it! I would guess/hope AOD did some analysis of their existing members and their spending habits, and determined that 3% everywhere was sustainable. Now a bunch of potentially higher spending, more PIF types have got the card, the calculus could change.

If there is nerfing, a good first step would be to simply place a cap on the 3% that can be earned, many cards have this (e.g. BCP/BCE $6K on groceries, Freedom/Discover $1500 per quarter on the 5%). I would think most MFs, with many other cards, would be OK with that, e.g. moving grocery spend to BCE rather than always using AOD.

But other solutions are possible too, such as cutting the rate, or, less popular with CUs I think, closing the cards of high spenders for "abuse"

Re: Do you think AOD card is here to stay?

PullingMeSoftly — Thu, 24 Sep 2020 19:32:24 GMT

@NRB525 wrote:
Outliers in the credit card reward space don't last forever. AOD CU is a relatively small CU, and offered a relatively good CC reward structure to their members. The interweb found it, and will eventually drive it back to either within averages for reward earnings, or to re-restricted membership.

there are numerous examples over the last several years of this Flavor of the Month phenomenon.

@NRB525 While I agree that nothing lasts forever, AOD hasn't shown any signs of pulling back on the earning rate. In fact, if you look at our approval thread, you'll see that we POUNDED them with 66 approvals and those are just the ones who shared their success. During the month of April alone there were 52 approvals, not to mention what came their way through DoC and from YouTubers. That would have been a moment of unsustainability if there was to be a breaking point, but AOD weathered that storm. Granted, their UW slowed and we've seen only 14 approvals since May.

@UpperNwGuy I think a better comparison would be to look at USAlliance and their Visa Signature with a similar 3x earning rate (at $.01 per point, it's a 3% card). USAlliance, unlike AOD, actually changed their tune under pressure and took their card down for a while. But if even they brought theirs back, and AOD continues to march forward, that suggests these smaller credit unions have figured out the sustainability formula. Both AOD and USAlliance drew in a healthy amount of new customers from these products.

Re: Do you think AOD card is here to stay?

Aim_High — Thu, 24 Sep 2020 19:52:42 GMT

I'm confident that the AOD Visa Signature can survive, either as it is now or with some relatively minor caps or conditions.

There are other examples. The small People Caring More Credit Union (PCMCU) in Wisconsin offers a whopping 5% back on the first $1K spend monthly on their Platinum Rewards Mastercard. Membership is tightly restricted, though. And it's capped at $1K. But for many households, $1K goes a decent way towards credit card monthly spend, especially if used for uncategorized spending when combined with higher-earning category cards.

And of course, the 3% card that US Alliance FCU is offering is another example.

Alliant FCU still has their Visa Signature that pays 2.5% indefinitely and 3% in year one. Yes, starting in year two, you have a $99 AF so the breakeven point with a flat no-AF 2% card is $19,800 annually but that's only $1650 per month. So higher than 2% earnings are possible if someone were to concentrate spend on the card, which of course is the intent.

Apparently, USAA is still somehow making the Limitless Cash Back card (2.5% with no AF) continue to work for the members who got it and were grandfathered in.

If there were some changes to the AOD card, it could still be highly competitive relative to the big banks. I could see the card being closed to new members (like USAA limitless was), being capped on monthly spending , lowering the flat-rate to 2.5% or 2.25%, or adding an AF to get the 3%. Even with those changes, it could still beat the 2% earnings rate of a Citi DC, PayPal MC, PenFed PCR, or similar. Of course, I don't want to see these changes, but I'd rather see these (and have the card remain viable and competitive) rather than having them just close it down! And those changes may be what it takes to chase away any abusers who would ruin it for the majority.

Meanwhile, I'm not closing all my other uncategorized spend cards to focus on the AOD card. I'm using it but also planning as-if it could go away. Same as many other cards in my lineup, having back-ups and back-ups for your back-ups is simply good strategy.

Uncapped and Uncategorized Cash-Back Cards:

2.625%* *with Platinum Honors

1.5%

Re: Do you think AOD card is here to stay?

spiritcraft1 — Thu, 24 Sep 2020 21:11:54 GMT

Hopefully it still around in a few months when eith the DW or myself can join in the fun. I am a member now in waiting for a clean profile. The one thing they are not doing is offering any SUB which would increase any unsutainability financially for them.

The NFCU Flaship at 2% when it has the $500.00 SUB would be a tougher financial pill to swallow for a tiny CU I would imagine.

We will see what then next few months bring.

Edited to add: This is a CU also and there are no corporate jets, no 5 mansions for those at the top, no dividends, stock buy backs or any $%#@$ at the top getting bloated on the backs of the institutions customers. They are, after all, not a corporate profit above all orginization... it just has to "work".

Re: Do you think AOD card is here to stay?

Anonymous — Thu, 24 Sep 2020 21:08:38 GMT

For the first time I remember, I just got a set of offers from the other 3%, USAlliance, offering 5% on some local restaurants, and other offers on other types of store. More confusingly, some of the stores offer "2 points per $" which is less than the usual 3%! If it really is additional, then the extra 5% on restaurants would be pretty good.

Re: Do you think AOD card is here to stay?

UpperNwGuy — Thu, 24 Sep 2020 23:34:47 GMT

@Anonymous wrote:
@UpperNwGuy wrote:
Study the history of the USAA and Alliant high cash back cards.
Since you mentioned it why not share your insight as this would be a good time to refresh all of us?

USAA had a 2.5% flat rate card. After rolling it out to most of the states, they suddenly stopped accepting new applications. Apparently it was not profitable to USAA.

Alliant has a 2.5% card that has a 3% first year bonus. They've been removing benefits over the course of the last couple of years. Apparently it was not profitable to Alliant in its previous form.

Dinosaur seems to have it in for me today. Is this something personal? I expected better from a former moderator of this forum.

Re: Do you think AOD card is here to stay?

Beast26 — Fri, 25 Sep 2020 00:30:23 GMT

Can anyone join this credit union and apply for this card?

Re: Do you think AOD card is here to stay?

coldfusion — Fri, 25 Sep 2020 01:39:10 GMT

@Beast26 wrote:
Can anyone join this credit union and apply for this card?

You'll find answers to all your questions and more in this thread:

https://ficoforums.myfico.com/t5/Credit-Card-Approvals/The-Anniston-Tidal-Wave-AOD-FCU-Approvals-Thread/td-p/5995645

Re: Do you think AOD card is here to stay?

sxa001 — Fri, 25 Sep 2020 02:51:23 GMT

I have been planning to try for this card after we close on a house, which could be as last as Feburary or March 2021, so who knows how it will look in 4-6 months. I hope I get lucky and it is still around and I can get in. Obviously if it is was profitable we would see more 3% everything cards. Personally if they capped it, it may defeat the purpose of me getting it (desire to use for some big purchases). My normal spend isn't all that much. I am constantly evaluating my cards (though I have been on hold with new accounts since May 2019 in prep of wanting to apply for a mortgage in late 2020). With less travel having a lot of cashback seems like the way to go, so heres to hoping this card sticks around!

Re: Do you think AOD card is here to stay?

Anonymous — Fri, 25 Sep 2020 03:19:43 GMT

@sxa001 wrote:
I have been planning to try for this card after we close on a house, which could be as last as Feburary or March 2021, so who knows how it will look in 4-6 months. I hope I get lucky and it is still around and I can get in. Obviously if it is was profitable we would see more 3% everything cards. Personally if they capped it, it may defeat the purpose of me getting it (desire to use for some big purchases). My normal spend isn't all that much. I am constantly evaluating my cards (though I have been on hold with new accounts since May 2019 in prep of wanting to apply for a mortgage in late 2020). With less travel having a lot of cashback seems like the way to go, so heres to hoping this card sticks around!

Also need to keep the excitement in perspective! Just looking at rewards, compared to a standard 2% card, if you had $20K in non-category spend (i.e. where you have no other card with a higher rate) you would get an extra $200. Certainly not nothing, but not something you would want to curse your horrible life if you miss it.

And yes, there are other benefits such as the low APR, but that's going to be used a lot less.

Re: Do you think AOD card is here to stay?

jdbkiang — Fri, 25 Sep 2020 04:38:58 GMT

@spiritcraft1 wrote:
Hopefully it still around in a few months when eith the DW or myself can join in the fun. I am a member now in waiting for a clean profile. The one thing they are not doing is offering any SUB which would increase any unsutainability financially for them.

The NFCU Flaship at 2% when it has the $500.00 SUB would be a tougher financial pill to swallow for a tiny CU I would imagine.

I think this is actually a huge deal. 3% is a lot to give out, but it would take copious amounts of spend to balance out giving away a SUB like the CSP's recent bonus, even if it has a $95 AF.

$1000 SUB - $95 AF = $905

$905 @ 3% cash back = $30166.67

That's not even considering the points Chase has to give out for actual spending on the CSP, which would make the break-even point even higher.

Re: Do you think AOD card is here to stay?

Anonymous — Fri, 25 Sep 2020 11:53:13 GMT

@UpperNwGuy wrote:
@Anonymous wrote:
@UpperNwGuy wrote:
Study the history of the USAA and Alliant high cash back cards.
Since you mentioned it why not share your insight as this would be a good time to refresh all of us?
USAA had a 2.5% flat rate card. After rolling it out to most of the states, they suddenly stopped accepting new applications. Apparently it was not profitable to USAA.

Alliant has a 2.5% card that has a 3% first year bonus. They've been removing benefits over the course of the last couple of years. Apparently it was not profitable to Alliant in its previous form.

Dinosaur seems to have it in for me today. Is this something personal? I expected better from a former moderator of this forum.

You have been asking questions and then ... gone! You have knowledge that could certainly enlighten a few of us! If being asked to offer the knowledge is not of interest, most unfortunate for some of us! Also, you ask the questions it is totally on us to follow if we are interested. Not a problem from where I stand?

Re: Do you think AOD card is here to stay?

BearsCubsOtters — Fri, 25 Sep 2020 16:04:43 GMT

I just want to add that USAA requires at least a $1,000 direct deposit into a USAA checking account in order to qualify for the 2.5% cash back on Limitless; otherwise it reverts to 1.5%.

I believe the idea behind Limitless was to reward their most valuable customers; hoping that between using a USAA checking account in conjunction withthe Limitless would net them more income. I think it was an experiment from the beginning and they just did not see the numbers to support keeping the card live for future applicants.

As for AOD...it does not seem entirely profitable but you never know. I could see changes to it in the future, most likely a cap on how much one can earn per month/quarter/year.

As with any card, enjoy it while you can.