May 8, 2009

Credit Card Rewards, Pt.2
  How do they size up?

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At this point, there probably isn’t any recourse for GM customers who have already earned all those new car points; however, consumers can minimize their risks for the future by taking a closer look at what all those credit card reward systems are all about. As major credit card providers have taken record breaking hits of delinquent and default accounts, they too have tightened up their reward systems in an effort to cut expenses. Many are changing the terms of the reward programs and have increased credit card spending requirements while reducing the potential to earn more points. Some have increased the number of points needed to redeem for rewards as well as narrowing the window of expiration.

Until recently, some credit card lenders provide consumers an opportunity to double points for special transactions like purchasing airline tickets online or ordering products and services during limited promotions. A few airline cards once offered 10,000 to 25,000 miles just for opening one of their branded cards. These promotions have virtually disappeared. Most now require a minimum purchase requirement within a limited time period prior to receiving any rewards. Furthermore, an increasing number of lenders have instituted an annual usage fee for their cards. It goes without saying the added obstacles consumers face in redeeming their points have sent the value of rewards spiraling downward. Recent reports have indicated that the average credit card reward point is worth less than a penny. Not a very good return.

With the sinking return on money, consumers need to be more reward savvy by weighing the benefits of using any debit or credit card. The good news is, more business have explored the possibility of working more closely with companies like Affinity Solutions, to market their products through relationship building. Not only has it proven beneficial for the merchant, it provides the end consumer with more options.

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