@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@Namaste7 wrote:
I closed the card. I didn't hold other cards with Barclay and nor did I plan too. I saw better growth with cards from other issuers. With the change to the rewards structure, I was better off closing the card and opening up CLI space for my existing portfolio. No regrets--except I should have never opened the FOTM card to begin with!
Well, while you should never open FOTM cards without evaluation, there was nothing wrong with the Uber card until recently (well, until Feb 2020 I guess). 4% on restaurants year round with no cap and with no AF was very good. If you got it early enough to make use of it, not a poor choice at all. We all need to be prepared for bad things to happen to our good cards, just a fact of credit life.
Don't be surprised if we see other changes to rewards cards in 2020, similar to what the Uber card did. Impact might be higher on points cards. I don't like points cards for that reason. But it can happen with cash back cards too. I think we hit peak on rewards, and rewards have been crazy as card companies fought over market share in the "new credit card market" (rewards cards, linked card structure, multiple cards by a single issuer). Its just an opinion, but I don't think the lucrative rewards will last forever.
Until there is a strong economic downturn, my guess is that there will always be some issuers going for market share (Citizen's Bank 5% on everything being a recent example). And while cards get nerfed, there is (much less often!) movement in the other direction. Amex BCP is a good example, where they added some 6% and 3% categories without changing the AF. (The Amex charge cards also saw some positive changes, but generally with an AF increase). An older example is Chase Amazon going from 3% to 5% for prime users (and adding Whole Foods when acquired!) Plus cards make minor improvements such as dropping FTF
I am just wary about "rewards have peaked", thinking back to the intro of the Double Cash. Many here doubted a 2% non-Amex card could survive. Now there are several alternatives. Again, with a sharp downturn issuers will definitely cut back, but until then, there are always bright sparks in issuers marketing departments who think they have come up with a killer idea, some are good, others lose money!
An economic downturn will certainly accelerate it. We'll see. I'm looking more like changes/cuts that are smaller. The Uber change is a good example. It really is a cut in benefits because you are forced to use Uber dollars now. It's a limitation with restricted benefits. Like blackout dates for airline rewards.
Doesn't look like an economic downturn will happen in 2020, but I still think we'll see some changes.
Based on merchant fees ranging from 2.3-3.9% in most cases, 2% rewards rate looks sustainable, but only to the best credit risks. 3% is harder to sustain. 4% isn't sustainable long term. It's more like an "introductory rate" for the new rewards card era.
But it's just an opinion. Given those numbers, one can see how card companies can be squeezed.
On the other hand, deals/offers may expand. Card companies love those. You can load up on those every month and they will love you more. Use a card for only the rotating 5% categories, not so much love.
