Personal Finance Writer
Summer Hull writes the weekly “Get to the Points” column for CreditCards.com
The content on this page is accurate as of the posting date. Please see the bank’s website for the most current version of card offers.
Rewards cards are always changing
and evolving, and recently they have been doing so at a rapid rate thanks to a
hyper-competitive market and increasing technological advances.
It wasn’t that long ago that
getting 25,000 airline miles as a sign-up bonus was a pretty big deal and annual fees were rarely more than $80 per year.
Credit card sign-up bonus points
were also often awarded with just one purchase on the card instead of needing
to spend thousands just to trigger the promotion, and just about everyone had
access to the same bonuses.
Those days are largely gone, and
the new rewards card trends include incentives to keep you spending on your
cards, provide massive bonuses for some, smaller bonuses for others, reward you
faster, and more.
Annual spending bonuses are on the rise
Today, not only do most rewards cards
require you to spend thousands of dollars upfront to earn a big sign-up bonus,
but some cards are also requiring thousands (or even tens of thousands) of
dollars to be charged on the card annually to trigger an anniversary bonus,
such as hotel award nights or mileage bonuses.
Frankly, this is the smartest thing
a bank can do as customers want to be rewarded for their spending and need
incentives to keep using a specific card.
The Barclays Arrival Premier
World Elite Mastercard, launched in April 2018, is a perfect example of this as it does not currently
offer any sign-up bonus, but instead awards 25,000 bonus miles per year on an
ongoing basis for those who charge $25,000 in purchases.
The biggest sign-up bonuses get more targeted
Thankfully, the era of the big
sign-up bonus is far from over, but we are seeing an increasing shift to the
biggest bonuses being reserved for a lucky targeted few and for a shorter
period of time.
This isn’t exactly a new trend, but
it certainly isn’t going away. It pays to stay on the lookout in your inbox,
mailbox and even checking CardMatch on CreditCards.com to see if there are targeted
offers available just for you.
Another example is the Southwest Airlines
Rapid Rewards card, which offered a tremendous sign-up bonus based on geography. Only
those who live in California were eligible to earn a companion pass after one
purchase on the card. Banks are increasingly relying on customer data to target
their offers, and are not holding back
on marketing specifically to those folks to get them to apply.
More restrictions on awards and welcome bonuses
The big welcome bonuses are still
out there, but the sun is setting on getting outsized value from some.
We have seen the Hyatt Credit Card from Chase go from offering two free nights to use at
any Hyatt to 40,000 World of Hyatt points to use as you wish.
If you stay at lower category
hotels that cost a few thousand points a night that was good news, but if you
like to use your sign-up bonus to stay at high-end resorts or hotels in Paris,
Kauai, Sydney, the Maldives or other aspirational destinations, that was very
bad news indeed.
Just recently, the IHG credit card
made a shift from an unrestricted anniversary night that could be used at any
of its properties to one that you can only use at properties
costing a maximum of 40,000 IHG points per night.
This again took some of the luxury and
ability to get outsized value from that award, since their award chart goes as
high as 70,000 points per night.
Shift toward mobile and instant redemptions
Banks are also trying to have their cards not only at the top
of your wallet, but increasingly at the top of your smart phone.
The dust hasn’t yet settled on who will win the battle for mobile
banking and mobile wallets, but rewards cards are making a play into your phone
via instant mobile redemptions.
A leader in this department is U.S. Bank. They allow you to register
to use “Real Time Mobile
Rewards” and instantly select when you want to redeem points against a
recent charge for a statement credit via text message. They will even give you
500 bonus points just for signing up for this feature!
Co-branded cards are far from dead
It goes without saying that hotel
and airline transfer partners continue to be an important piece of the puzzle for
many mid-market and premium rewards credit cards, but co-branded credit cards
are far from dead.
Just in 2018 we have seen brand new
co-branded cards tied to Starbucks and Uber with new versions
of co-branded cards released for IHG and Hilton. We also know that in 2018 the
line-up of Marriott and Starwood cards will be getting a makeover. I would not
be the least bit surprised to see co-branded cards continue to emerge for millennial-friendly
brands such as Airbnb.
Get rewarded for recurring purchases
As more card issuers want you to
spend a hefty amount on their cards each year to get the best annual rewards, a
similar yet different trend is to entice customers to charge certain types of “sticky” recurring transactions to their cards.
The Chase Ink Business Preferred card
will not only give you 3x points for charging your cellphone bill each month,
but doing so means that all phones on that
bill are covered in the event they are lost, stolen or damaged, less a $100
deductible and subject to some limits.
The Uber Visa has a very similar
cell phone protection benefit as well as a $50 annual streaming subscription
credit that can go toward Netflix, Hulu, Spotify and Amazon Prime
subscriptions if you charge $5,000 or more on the card each year. That is a pretty
fantastic benefit considering the Uber card has no annual fee.
It is fair to say that 2018 is a
time of change for rewards credit cards as they shift away a bit from giving
the biggest bonuses to all new customers, hone in on giving bigger bonuses to a
select few, and reward those who continue to use their cards long after the
welcome bonus has been achieved.
See related: How to use foreign credit cards for U.S. airline travel?, Hotels you can book for 5,000 points or less
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