Rewards Programs

Reward credit cards provide greater flexibility


Credit card companies are increasing the flexibility of their reward credit card programs due to heated competition for customers.

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Amid intense competition, credit card companies are increasing the flexibility offered by their reward credit card programs while also getting merchants to help foot the bill to fund the cards’ expensive perks.

Compare Reward Credit CardsCredit card issuers are adjusting their reward programs more often than before, creating new types of benefits and offering promotions for the most common types of purchases, such as buying gasoline. American Express and Citi are cutting back on some rewards that were linked to a wide variety of small purchases, instead rewarding cardholders who pay with their plastic at different types of merchants, including cable companies and specific apparel retailers.

In the latest move showcasing a push toward greater flexibility, Chase will offer the new Chase Freedom credit card that lets consumers shift back and forth between rewards in the form of cash or points without losing either as they make the switch.  The new Chase credit card will supply rewards on all purchases, with a sizable triple reward of 3 percent cash back or triple points for eligible transactions at grocery stores, gas stations and fast food restaurants, including merchants like Dunkin’ Donuts and 7-Eleven. Additionally, the Chase Freedom credit card has no annual fee and provides a number of other benefits when used to make small purchases.

Chase explained that its Freedom credit card was created in response to customers requests for greater control and flexibility when using their reward credit cards.

Meanwhile, other credit cards are now offering “experience” rewards.  For example, American Express cardholders may redeem 20,500 points for tickets to a Barbra Streisand concert in Florida in October 2006.

In other developments, issuers are granting customers the ability to earn rewards more quickly.  American Express notes that some consumers prefer “treats” like redeeming 3,000 points for the download of 25 songs on iTunes, versus saving up thousands of points for a large reward.  In August 2006, AmEx overhauled its successful membership rewards program, eliminating its double rewards points for “everyday spending” and establishing a program to promote shopping at particular retailers.

With increasing frequency, credit card companies are more deeply probing cardholders’ spending patterns to determine which rewards will be most successful.  Visa constructed a program in 2005 that pulls data from 65 million cardholder accounts and uses it to customize offers, allowing the company to create unique events that encourage shopping at certain merchants.

Merchants are therefore taking a more active role in credit card reward programs, and increasingly are helping to fund these same programs.  While credit card issuers and merchants are hesitant to discuss the economics of such programs, market research firm Martiz Inc. reports that it is a popular trend for the way it encourages cardholder spending while controlling costs for the card issuer.

Consumers should expect further changes to reward card programs.  Mastercard’s consulting arm, Mastercard Advisors, explains that declines the use of a reward credit card can be expected if a program is allowed to age without the regular addition of offers or improvements.  Mastercard adds that while just 10 years ago, credit card issuers did not even have rewards departments, now there are departments that do nothing else.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

What’s up next?

In Rewards Programs

Credit card needed for literal window shopping

Credit card users visiting the Polo Ralph Lauren store on Madison Avenue in Manhattan can make purchases from outside using an interactive holographic screen on the window.

See more stories
Credit Card Rate Report Updated: September 16th, 2020
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.