Credit Card Rewards Progams and the Credit Crunch
An article in today’s Wall Street Journal by Jane J. Kim, “Banks Make Rewards Plans Less Rewarding,” brings to light a long term trend in the credit card world. Although the Journal article focuses more on recent changes, credit card rewards programs have been pulling back perks for the past three years.
The main victims of the credit card rewards crunch is the cash back credit card. Two years ago, a number of credit cards offered a full 5% cash back on all gas, grocery, and drug store purchases. Today, the only credit card to offer that level of cash back is Blue Cash from American Express. However, a person must spend $8500 a year to reach 5% cash back. Before that, the cash back level is 0.5% to 1.5%.
Airline miles rewards have also seen a pullback, but these changes have as much to do with the airlines as the credit card companies. For the most part, consumers still earn the same amount of miles. In some cases, such as with the you can earn more. Unfortunately, the airlines are requiring more miles to get seats, so the value of the miles you earn is diminished.
Inspired by the Journal article, I put together a list of the best credit card rewards programs in the main section of Smart Credit Choices which is accompanied by my editorial opinion. Ultimately, and specifically for smart, rewards junkies, the best way to earn rewards is to employ a multi-card strategy. By using a different card to get the best rewards, you can essentially build the best rewards credit card yourself.
For more information, you can read more about the best credit card rewards programs or compare all rewards credit cards in the main section of this website.
Sources: http://online.wsj.com/article/SB123180989113175857.html?mod=googlenews_wsj
