Credit card perks going away?

[kdm31091]

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@Anonymous wrote:

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@Pikaboo-icu wrote:

Wellllll

I'd say the smartest lender will be the one that keeps ALL their perks and scoops up all the peeps that jump ship from the companies that nerf their cards.  

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This. 

The banks opened Pandora’s Box when they started offering rewards perks. If they take them away, you can bet the credit unions will love to pick up the slack. 

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I don't think anyone is saying they will take rewards away, but rather that we could see rewards decline a little bit. Credit card rewards have been around for a long time. It wasn't that many years ago that a basic 1% was the norm. It's only fairly recently that things have gotten much bigger.

My guess is we will see lower SUBs and possibly lower ongoing spend percentages, though I think banks are really at this moment concerned with SUBs -  upfront costs from people, many of whom aren't going to keep the cards long term.

[Loquat]

It'll certainly be interesting to see how this shakes out long term.  As for lenders reducing subs, minimizing categories, etc...well, in my opinion, that's their own fault.  They created the game, the rules, and they're still complaining because some of us are still winning within the parameters that they've set. 

They have folks to are on their payroll who should be educated enough to know how the game will be played by churners as well as those who carry balances.  Offering subs and crying about it later falls on deaf ears.  Chase had many other cards prior to the CSR and I'm sure the data to support how consumers were going to use the card...especially churners.

Lenders have, and continue to, take in lots of profit from consumers and I shall not shed one tear for these folks because their margins aren't as large as they want them to be.  

If they want to start picking at subs and the categories that we've originally bought into it's their right to do so...but we as consumers also have the right to spend our money elsewhere.  

To the whining credit card lenders who decides to go the route of messing with bonus categories or dwindling their offerings down to the very basic level, my thoughts are...bring it - game on!

[quickstrike]

I've seen some of those articles as well.  I believe we're already starting to see some companies to do this.  Instead of offering a single huge bonus upfront, they are breaking it down to encourage more spend.  For example, spend X amount and get a certain number of points/cash.  Then after that, spend an additional X amount, and get the remaining bonus.  Also, companies are taking away some benefits as well which as been seen recently with Chase and Discover.  

[Anonymous]

I have to agreement. I think the credit card companies will start to focus more on promos which are intended to attract people who actually spend on their cards as opposed to churners. 

[jdbkiang]

Well, Amex does have higher AF's, in general, and their SUB's are only once every 7 years, so they did do that already.

Additionally, Chase and certain other banks already have SUB's that extend through 6 or even 12 months, so they're certainly catching on.

[longtimelurker]

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@Pikaboo-icu wrote:

Wellllll

I'd say the smartest lender will be the one that keeps ALL their perks and scoops up all the peeps that jump ship from the companies that nerf their cards.  

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Like Blispay?   Presumably issuers reduce perks to increase profitibility and make shareholders happy.   Keeping all the perks and keeping customers that incur costs in excess of revenue is not a winning formulae.     I guess just as now, it works if you can get enough of your customers to pay interest....

[wasCB14]

People who jump ship after nerfs tend to be informed and unprofitable. Those are precisely the customers other banks might like to avoid.

Of course, even some of those customers may end up occasionally paying a late fee or carrying a balance and become profitable.

[Anonymous]

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@wasCB14 wrote:
People who jump ship after nerfs tend to be informed and unprofitable. Those are precisely the customers other banks might like to avoid.

Of course, even some of those customers may end up occasionally paying a late fee or carrying a balance and become profitable.

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They get their swipe fees and otherwise have a dormant card balancing out riskier customers which allows them to sell their debts at a more favorable exchange. Don’t buy in to this “these customers are unprofitable” nonsense. They always make a profit in some way, they’re just not making as much as they would like to (but on the flip side, they are dealing with lower risk borrowers at the same time). 

Every customer that makes payments on their accounts is valuable in one form or another, even if they just act as a risk buffer against other customers who don’t pay. 

[Anonymous]

As more and more people become informed about SUBs, churning and other ways to 'game' the system, the lenders are having to tighten up. No longer are we in the days of the churners being a very small minority. I don't blame them. It's a business at the end of the day.

[Pikaboo-icu]

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@longtimelurker wrote:

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@Pikaboo-icu wrote:

Wellllll

I'd say the smartest lender will be the one that keeps ALL their perks and scoops up all the peeps that jump ship from the companies that nerf their cards.  

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Like Blispay?   Presumably issuers reduce perks to increase profitibility and make shareholders happy.   Keeping all the perks and keeping customers that incur costs in excess of revenue is not a winning formulae.     I guess just as now, it works if you can get enough of your customers to pay interest....

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I was never interested in Blisspay, their model had me skeptical.

The zero int offer and CB was not sustainable.

There will always be a block of customers that pay interest, whether because they need to carry a balance or the block that believe carrying a balance & paying payments over time is better for their credit.

Yes, "we" know that isn't the case but a lot of people think it is.