August 6, 2009
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News: Credit Card Membership Rewards
Credit card companies have begun offering some new card programs with a variety of different membership reward structures. As creditworthy customers continue to tighten up their spending habits, credit card companies have had to become more creative in acquiring their business. The membership concept has been growing and customers who take advantage of these platforms have enjoyed some very delightful rewards. American Express has one of the most popular whereby customers can use points for free travel, gift cards, dining, and hotel stays. Citigroup, Discover Financial Services, and JP Morgan Chase also offer a multi card rewards program. A multi-card program works well because the lender can offer the same program to a variety of credit card users such as JPMorgan Chase's Ultimate Rewards cards and Chase Freedom cards.
This latest trend whereby credit card companies link the same rewards program to several different cards could be an indication that lenders are looking to narrow down their card product line. Such a move would cut costs and enable lenders to offer a wider selection of appealing rewards to encourage credit card customers to use their products. CitiGroup is a good example of how efficient their program works. Not only are cardholders linked to their Thank You program, but their banking customers who use their debit cards can earn points as well.
It all sounds very good; however, cardholders actually receive less for their points with a multi card program than those with just one specific reward. The main reason is that programs with a single reward typically award more points per dollar. Another drawback is that some of the multi credit card programs rotate offerings and discounts making is less beneficial to use their card for the same items such as gas and groceries year round. The bottom line is; if you spend a lot of money in one category, you might be better off searching for a card that offers rewards based on your purchases in that specific category.