AOD Nerf has come

[Bockrocker]

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@CreditCuriosity wrote:

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@xenon3030 wrote:

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The AOD biz plan to give flat 3% in any category without cap and without AF was simply a red flag. Not sure why even they could convince themselves to launch it.

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Likely their member base carried balances being a small tiny town in alabama with an average income of around 40kish..  Then the loophole let the flood gates open and the rest is history.  That card would likely be around if there was a geo restriction of a part of alabama only where AOD resides

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The amount of people who got the card and took full advantage was pretty small overall.  It was only available for two years to people willing to jump through a lot of hoops (and get approved), and mostly only known to those who frequent this forum or DoC.  For reference, AOD membership increased by ~3000 from June 2020 to January 2024.  It offered no SUB or bonus categories.  I think it's fair to assume that 2% rewards is probably about break even or close to it.  So a 1% loss to a small subset of customers.  Actually in fact, their assets increased YoY during this time frame.  They even issued a bonus dividend last year.

It will be interesting to see how long the Robinhood card will last at their promised benefits. The CEO wouldn't guarantee even 18 months, and it's open nationally and a well known brokerage.

[xenon3030]

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@Bockrocker wrote:

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The amount of people who got the card and took full advantage was pretty small overall.  It was only available for two years to people willing to jump through a lot of hoops (and get approved), and mostly only known to those who frequent this forum or DoC.  For reference, AOD membership increased by ~3000 from June 2020 to January 2024.  It offered no SUB or bonus categories.  I think it's fair to assume that 2% rewards is probably about break even or close to it.  So a 1% loss to a small subset of customers.  Actually in fact, their assets increased YoY during this time frame.  They even issued a bonus dividend last year.

It will be interesting to see how long the Robinhood card will last at their promised benefits. The CEO wouldn't guarantee even 18 months, and it's open nationally and a well known brokerage.

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The concern is the general net loss associated to this product. To be able to run a business successfully, any loss mechanism needs to get addressed. The YoY asset increase is another story (limited connection to the CC product).

[CreditCuriosity]

Won't touch the Robinhood card they have done me wrong once before and never again.  Scummy company if you ask me.  Although certainly will likely be a lot of people that will get that card and that won't be me.

[xenon3030]

Not a fan of Robinhood. I opened a brokerage account with them some time ago and after observing Plaid, I refused to fund the account.

It is strange that some services like Plaid can stay in business, due to collecting significant amount of information (several are not necessary). There were some lawsuits but beyond paying some customers, I did not see any further outcomes.

[coldfusion]

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@Anonymous wrote:

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@Citylights18 wrote:

Glad I avoided the AOD hype train in the first place.

There are so many restaurant or grocery cards that do 3% or better. BoA has 3% online shopping. Amazon has 5% cards. There aren't too many holes to be filled for a catch all 3% card anyways. Utilities charge more if you don't direct deposit which negates any cash back.

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MyFico rule 97(a):  My situation isn't universal.

Here in the Boston area some utilities did indeed charge a fee, but it was small (~ $2.50 for up to $600) so paying $600 with a 5% card left you well ahead, even with the lost interest on the float for maybe two months.   For a while Paypal Bill Pay meant you could avoid the fee anyway, and now at least one utility has dropped the credit card fee entirely.   So you are losing money by not using a credit card.

Back to AOD:

And, unlike you, I regret not being on the AOD bandwagon (I joined the much shorter lived USAlliance).   I did a lot of non-category spend (around $30K last year) on a 2% card so I would have got an additional $300, and that's just one year.  And that excludes some major tax payments, where the fee was too much for a 2% card, but would be net positive for 3%.   Even if the card was now useless, or close, 3 or 4 years of that isn't bad at all.   And the nerfed AOD has some residual value, quite a lot for some.

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I'm throwing a bunch of virtual kudos your way since I could only give you a single real one, as I'm in the same boat.

side note:  I haven't received a letter either and  Informed Delivery doesn't show them having sent me one.

[ptatohed]

I have not received my letter yet.  I am pretty far away geographically (S. CA).  And I did get my card a little later in the open app period (Fall '21) if they happen to be sending out batches of letters in order of account length.  cf (@coldfusion ),  are you saying there is an information section on the AOD website that would indicate that they sent out a letter?     

CC ( @CreditCuriosity ), are you seeing that a letter was sent on the AOD website?  

[northway]

I'm actually surprised after the nerfing that AOD wouldn't open the card back up to members. It's hardly a loss leader anymore.

[ptatohed]

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@northway wrote:

I'm actually surprised after the nerfing that AOD wouldn't open the card back up to members. It's hardly a loss leader anymore.

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I doubt it.  They don't want a bunch of people spending up to $1500 a month and then switching to another card.  I think this nerf was just a way of compromising or softening the blow to existing card holders.  In fact, I think even this current nerf will be nerfed further in a year or two.  

[CreditCuriosity]

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@ptatohed wrote:

I have not received my letter yet.  I am pretty far away geographically (S. CA).  And I did get my card a little later in the open app period (Fall '21) if they happen to be sending out batches of letters in order of account length.  cf (@coldfusion ),  are you saying there is an information section on the AOD website that would indicate that they sent out a letter?     

CC ( @CreditCuriosity ), are you seeing that a letter was sent on the AOD website?  

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@ptatohed not sure where that would be seen on the website.  I am guessing this impacted everyone as I did live in TN when got the card and now in FL and both boarder Alabama although certainly not in their geo footprint still.  If you can explain where you would like me to check on website be glad to check.

[CreditCuriosity]

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@ptatohed wrote:

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@northway wrote:

I'm actually surprised after the nerfing that AOD wouldn't open the card back up to members. It's hardly a loss leader anymore.

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I doubt it.  They don't want a bunch of people spending up to $1500 a month and then switching to another card.  I think this nerf was just a way of compromising or softening the blow to existing card holders.  In fact, I think even this current nerf will be nerfed further in a year or two.  

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Yes don't see this happening as 1000's of people would apply for it and just hit them for the 3% and leave.  They don't offer auto loans out of their state, etc so they would never be made whole again and would cost them to much money imho.  Might not sound like a lot but it all adds up especially with tons of people signing up for a capped 3% anythign card as 3% > 2% by 50%.  People would be all over it if they could still.  I started to wonder if this card would ever be nerfed but indeed it was and now they are watching it a lot more closely it appears and wouldn't be suprised if another ones comes as well.  Hopefully they stopped the membership at enough people where the bleeding isn't so bad and allows it to remain how it is as will always have a place in my heart but will not be in my wallet and just put it on reoccuring bills as close as I can to 1500.