When airlines and hotels change their rewards programs, it is almost always for the worse. For example, many hotel programs underwent a major downgrade earlier this year, and Southwest Airlines recently announced that it would require 15% more points to redeem award flights in its lowest fare class.
But recently, several credit card reward programs have changed for the better. Let’s take a look at a few of them.
Chase Ink Bold and Ink Plus cards
Chase Ink Bold and Ink Plus cardholders recently received an updated Guide to Benefits, which goes into effect Nov. 1. Instead of curtailing benefits, Chase is offering substantial improvements. Purchase Protection coverage is increased from 90 days to 120 days, while its auto rental collision damage waiver removes territorial restrictions that excluded rentals in Israel, Jamaica, the Republic of Ireland and Northern Ireland. In addition, the coverage becomes primary, which means that you will not have to first make a claim against your own personal automobile insurance.
In addition, these cards now feature Trip Cancellation Insurance. According to Chase spokesman Steve O’Halloran, “If a trip is canceled or cut short by sickness or severe weather, Trip Cancellation Insurance reimburses non-refundable trip expenses purchased using the INK Bold credit card including pre-paid trips made to travel suppliers (i.e. hotels, tours, all-inclusive packages).”
Finally, cardholders also receive $500 of price protection coverage in the event that an eligible purchase sees a price reduction within 90 days of purchase.
Citi ThankYou Preferred
Citi’s ThankYou line of reward cards offer points that can be redeemed for gift cards, merchandise and travel reservations. This summer, it began offering double ThankYou points for dining and entertainment purchases such as admission to movies, museums, amusement parks and sporting events. On the downside, the anniversary bonus of 1% – 3% was discontinued, but nearly all cardholders will ultimately receive more points in this new program.
American Express Business Rewards Gold
American Express recently sent out a notice to cardholders indicating that they would now earn double Membership Rewards points on U.S. purchases made directly from select computer hardware, software and cloud computing providers. Needless to say, those who manage an Internet-based business or a corporation’s information technology department will now be able to earn far more points than they used to.
What’s Behind the Changes?
The credit card market is highly profitable, and competitive. In each of the cases above, each card issuer appears to be taking steps to match the features of its competitors’ products:
- The Chase Ink cards are offering better travel insurance and purchase protection policies to compete with American Express, which has traditionally offered the most generous benefits in these areas.
- The Citi ThankYou Preferred card is matching the Chase Sapphire offer of double points on dining expenses, and exceeding its close competitor by also granting double points on entertainment expenses, as well.
- The American Express Business Rewards Gold is aiming to compete with the Chase Ink cards, which already offer 5x rewards at office supply stores and on telecommunications services.
How You Can Benefit
Savvy credit card users will manage their returns on their reward cards with nearly as much interest as they will on their investments. In a bull market, like we see today, cardholders would be wise to continuously re-evaluate the value of the rewards they are earning on their most common purchases.
At the same time, those who carry a balance should always be looking for cards with the lowest interest rates, which are not reward cards. In this way, these cardholders can focus on paying off their debt, not chasing rewards for spending.
By staying on top of changing market for credit card rewards, cardholders can continue to receive all of the points, miles and cash back that this industry has to offer.
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