Big sign-up bonuses, card changes, mergers offer lessons
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Sometimes, though, when you focus on details you can miss the bigger picture. As 2016 draws to a close, let’s look back at some of the biggest stories in reward cards this year — and look ahead at what these trends will mean to you in 2017.
1.The return of big sign-up bonuses.
Offers of 100,000 points when you sign up for a new card can be hard to come by, but in 2016, there were at least two. In August, Chase unveiled a new big-bonus card, the Chase Sapphire Reserve. Its $450 annual fee is hefty, but 100,000 Chase Ultimate Reward points go a long way, and travel credits help defray some of the cost of that annual fee. Another card dangling a 100,000 sign-up bonus in 2016: The American Express Business Platinum card (annual fee: $450) offers up to 100,000 Membership Rewards points.
What this means to you in 2017: If you like travel as a reward, you should strongly consider these card offers. They might not be around much longer.
2. Issuers crack down on card churning.
As more people have become familiar with the value of reward cards, issuers are setting limits on the practice of card churning. No longer can you apply for unlimited cards, receive the sign-up bonuses, then close the cards without penalty. Chase apparently will not approve customers for new cards if they have applied for five or more cards in the last two years. (The company has not publicly confirmed the policy, but strong anecdotal evidence suggests it is in place.) Other issuers also have put limits on rewards.
What this means to you in 2017: Be selective. Before you apply, make sure you will receive value from the rewards card you are seeking. If you are interested only in rewards and aren’t in need of a new credit card, hold out until there is a big rewards offer being made.
3. Costco switches card issuers.
It is rare for a bank to part ways with a major co-branded card partner, but that’s what happened in June, when Costco switched its reward card from American Express to Citi. Costco cardholders received a new Citi card with different category bonuses that earn cash back at Costco. The warehouse giant also started accepting Visa cards, opening up new reward-earning possibilities.
What this means to you in 2017: Costco shoppers should examine the new Costco Anywhere Visa (no annual fee, but $55 Costco membership required), as it can help save money on gas and other purchases, especially when combined with an executive membership.
4.Reward program consolidation continues.
Marriott and Starwood completed their hotel merger in September, the latest in a string of travel-industry consolidations that have been going on for years. When travel partners combine, they merge reward programs. Usually, the companies try to make the consolidation as easy as possible on customers. In the long run, though, there are often changes to the reward programs and credit card offerings.
What this means to you in 2017: Reward programs change all the time, and not always for the better. It makes sense to spend reward points if you have them, rather than hoarding them for some future date when they could be worth less.
See related: 7 ways to get the most from rewards credit cards