Issuers are honing 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.
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 World of Hyatt Credit Card from Chase go from offering two free nights to use at any Hyatt to up to 50,000 World of Hyatt points to use as you wish after meeting minimum spend requirements.
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.